Annual report 2008

BinckBank N.V.Vijzelstraat 201017 HK AmsterdamNetherlands

P.O. Box 155361001 NA AmsterdamNetherlands

T +31 20 522 0330F +31 20 522 0340E info@binck.comI www.binck.com

Annual report 2008BinckBank N

.V.

BinckBank N.V.Vijzelstraat 201017 HK AmsterdamThe Netherlands

Correspondence addressP.O. Box 155361001 NA AmsterdamThe Netherlands

Tel: +31 (0)20 606 26 66Fax: +31 (0)20 320 41 76

Internet: www.binck.com

BinckBank N.V., established in Amsterdam and entered in the Trade Register of the Amsterdam Chamber of Commerce under no. 33 16 22 23.

Investor RelationsTel: +31 (0)20 522 03 72Email: IR@binck.nl

Colophon

Coordination and productionImprima (Nederland) bv

PhotographyEveline Renaud, Amsterdam

Where reference is made in this annual report to Ô BinckBankÕ , it denotes BinckBank N.V. Where reference

is made in this annual report to Ô Alex BeleggersbankÕ , it denotes what was formerly part of Coš peratieve

Raiffeisen-Boerenleenbank B.A. (Ô RabobankÕ ), which BinckBank N.V. acquired in 2007. Where reference is

made in this annual report to Ô AlexÕ , it denotes the label under which the Alex Beleggersbank services are

provided. Where reference is made to Ô SyntelÕ , it denotes the subsidiary Syntel Beheer B.V.

This document is a translation of the Dutch original and is provided as a courtesy only. In the event of any

disparity, the Dutch version shall prevail. No rights may be derived from the translated document.

Continuing the theme of previous annual reports, the illustrations this year again trace the route from

BinckBank to a stock exchange, taking in historical and other landmarks, to symbolise the links our

clients have with the stock exchange through BinckBank. In previous years, we were in Amsterdam, where

our main office is located, and Antwerp, where we have our Belgian branch. This year, we are in Paris,

from where we run our French operations. Starting at ➊ the BinckBank branch, our route takes us via

➋ La DŽ fense to ❸ the Arc de Triomphe. Passing ➍ the Eiffel Tower, photographed from the TrocadŽ ro, we

cross the Seine on ➎ Pont Alexandre III and make our way to ➏ the Louvre. Our journey ends at ❼ Le Palais

Brongniart, the old stock exchange building. The people in the photographs are our colleagues from the

Paris branch.

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BinckBank overview ...................................................................................................................................................................... 2 Profile of BinckBank ........................................................................................................................................................ 3 Key figures ........................................................................................................................................................................4 Chairman’s message .......................................................................................................................................................8 Important events in 2008. ........................................................................................................................................... 10 BinckBank N.V. shares .................................................................................................................................................... 11 Vision, mission, strategy and objectives .................................................................................................................. 16 Strengths, weaknesses, opportunities and threats ................................................................................................. 19

Report of the Management Board ............................................................................................................................................ 21 Report of the Management Board ............................................................................................................................. 22 Risk management under Basel II and Pillar III disclosure ...................................................................................... 32 In-control statement .................................................................................................................................................... 52 Personnel and organisation ........................................................................................................................................ 54 Corporate social responsibility ...................................................................................................................................58

Report of the Works Council ......................................................................................................................................................59

CVs .................................................................................................................................................................................................. 61 CVs of Management Board members ........................................................................................................................62 CVs of Supervisory Board members .......................................................................................................................... 66

Report of the Supervisory Board .............................................................................................................................................. 69 Corporate governance ................................................................................................................................................................. 75 Introduction ................................................................................................................................................................... 76 Legal structure ............................................................................................................................................................... 77 Management Board ...................................................................................................................................................... 78 Supervisory Board ......................................................................................................................................................... 78 Summary of the 2008 remuneration report ............................................................................................................79 Compliance with the Dutch Corporate Governance Code .....................................................................................83 Supervisory Board .........................................................................................................................................................84 Anti-takeover defences ................................................................................................................................................85 Article 10 of the Takeover Directive Decree..............................................................................................................85

Financial statements ................................................................................................................................................................... 87

Other information .....................................................................................................................................................................166

Definitions and ratios ............................................................................................................................................................... 170

Contents

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B i n c k B a n k o ve r v i e w

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BinckBank is a full-service online bank for investors, ranked in the top five in Europe. As an online broker, we offer our clients fast, low-cost access to all the important financial markets around the world. As an online bank for investors, we help our clients look after their capital with our online advice and asset management services and online savings. We offer our professional clients fast, low-cost order execution and administrative processing of securities and cash transactions, in the form of insourcing (BPO) or licensing of the appropriate software.

BinckBank is the largest independent Dutch online bank for investors which is listed on NYSE Euronext Amsterdam. BinckBank has offices in the Netherlands, Belgium, France and Spain and employed 559 people as at year-end 2008 (year-end 2007: 481).

BinckBank was founded in 2000 and had 293,236 brokerage and savers as at year-end 2008, of whom 267,668 in the Netherlands, 22,486 in Belgium and 3,082 in France. BinckBank’s activities are divided between the Retail and Professional Services business units.

RetailRetail provides services for private investors under the Alex and Binck labels. Under the Binck label, we serve in particular the active and experienced independent investor, for whom we provide order execution at very low cost together with a range of facilities such as an investment website, including real-time streaming of prices and news, order book depth, research, advice and analysis.

Under the Alex label, we serve private investors who want to make the most of their capital. For these investors we offer a comprehensive investment site, an online savings account and online advice and asset management products. We also provide training courses for clients to help them improve their investing skills.

The Binck and Alex labels have been named by various independent research institutes as the best and cheapest online brokers in the Netherlands on several occasions in recent years.

Professional ServicesProfessional Services provides services for asset managers and banks. Our online product handles the processing of securities transactions and the relating banking administration process, from order execution to administrative processing, on behalf of our professional clients. The business unit’s clients have the option of entering into a service agreement with BinckBank or using software, supplied by Syntel to execute these processes themselves.

Profi le of BinckBank

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2008 2007* Change %Customer figuresCustomer Accounts 293,236 214,323 37%Retail 284,709 206,933 38%Professional Services 8,527 7,390 15%

Number of transactions 7,151,244 6,600,000 8%Retail 6,807,997 6,335,000 7%Professional Services 343,247 265,000 30%

Funds entrusted (€) 6,065,852,540 8,165,805,000 (26)%Retail 5,001,484,037 6,855,821,000 (27)%Professional Services 1,064,368,503 1,309,984,000 (19)%

Income Statement (x € 1,000)Net interest income 40,640 41,387 (2)%Net fee & commission income 101,181 110,942 (9)%Other operating income 6,162 5,504 12%Results on investments 1,230 286 330%

Impairment losses (reversals) financial instruments (205) (1,625) (87)%

Total revenue from operating activities 149,008 156,494 (5)%

Employee expenses (38,443) (37,569) 2%Depreciation and amortisation (31,789) (3,188) 897%Other operating expenses (37,316) (33,956) 10%

Total expenses (107,548) (74,713) 44%

Result from continuing operations 41,460 81,781 (49)%

Share in result of associates 520 80 550%

Result before tax 41,980 81,861 (49)%

Income tax expense (8,941) (16,637) (46)%Tax % 21% 20%

Result after tax from continuing operations 33,039 65,224 (49)%

Result after tax from discontinued operations 106 1,556 (93)%

Net result for the year 33,145 66,780 (50)%

IFRS amortisation 28,196 - Fiscal goodwill amortisation 2,792 -

Adjusted net profit ** 64,133 66,780 (4)%

Key fi gures

*) The comparative figures for 2007 are the pro forma combined results of BinckBank and Alex, i.e. the reported results of Binck and Alex

are combined.

**) Net profit adjusted for IFRS amortisation and the additional tax benefit on the difference between the commercial and fiscal amortisation of

intangible assets and goodwill acquired on the purchase of Alex.

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2008 2007* Change %Normalised adjusted net profit(x € 1,000)Adjusted net profit** 64,133 66,780 (4)%Elimination one-off tax benefit - (4,310)Elimination integration costs Binck & Alex 4,613 - Elimination discontinued operations (106) (1,556)Normalised adjusted net profit 68,640 60,914 13%

Information per share & ratiosEarnings per share € 0.43 € 0.98 Adjusted earnings per share € 0.83 - Dividend per share € 0.41 € 0.21

Cost Income ratio 72% 48%C/I ratio excluding IFRS amortisation 53% 48%C/I ratio excluding IFRS amortisation & integration costs 50% 48%

Balance sheet(x € 1,000)Cash and balances with central banks 39,289 9,522 Banks 244,412 422,028 Financial assets, investments 1,578,224 1,398,662 Intangible and tangible assets 387,556 413,356 Other Assets 328,913 512,858

Customer deposits 1,747,699 1,772,822 Financial Liabilities, Provisions, Other liabilities 353,054 516,788 Equity 477,641 466,816

Balance sheet total 2,578,394 2,756,426

*) The comparative figures for 2007 are the pro forma combined results of BinckBank and Alex, i.e. the reported results of Binck and Alex

are combined.

**) Net profit adjusted for IFRS amortisation and the additional tax benefit on the difference between the commercial and fiscal amortisation of

intangible assets and goodwill acquired on the purchase of Alex.

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2006 2007 2008Net profit

Profit BinckBank*

Normalised adjusted net profit

* The comparative figures for 2007 are the pro forma combined results of BinckBank and Alex, i.e. the reported results of Binck and Alex are combined.

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16%

84%

Retail Professional Services

Profit before taxes by segment

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2006 2007 2008Net Earnings Per ShareAdditional adjusted Earnings Per Share *)

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Earnings Per Share

* Net profit adjusted for IFRS amortisation and the additional tax benefit on the difference between the commercial and fiscal amortisation of Intangible assets and goodwill acquired on the purchase of Alex.

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Issued share capital Reserves *)

Share premium Unappropriated profit

Development equity BinckBank

* The treasury shares are subtracted from the reserves for presentation purposes.

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Interest income, Net Commission income, NetOther income Result on investmentsImpairment losses (reversals) financial instruments

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Income segregation BinckBank *

* The comparative figures for 2007 are the pro forma combined results of BinckBank and Alex, i.e. the reported results of Binck and Alex are combined.

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Employee expensesOther operating expensesDepreciation and amortisation

Costs segregation BinckBack *

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Business segmentation 2008 2007* Change %(x € 1,000)Net interest income 40,640 41,387 (2)%Retail 37,187 39,106 (5)%Professional Services 3,453 2,281 51% Net commission income 101,181 110,942 (9)%Retail 92,981 103,407 (10)%Professional Services 8,200 7,535 9%

Other operating income 6,162 5,504 12%Retail 960 - 100%Professional Services 5,202 5,504 (5)%

Investments result 1,230 286 330%Retail 933 286 226%Professional Services 297 - 100%

Impairment losses (reversals) on financial instruments (205) (1,625) (87)%Retail (205) (1,625) (87)%Professional Services - -

Total income from operating activities 149,008 156,494 (5)%Retail 131,856 141,174 (7)%Professional Services 17,152 15,320 12%

Staff costs (38,443) (37,569) 2%Retail (30,992) (29,479) 5%Professional Services (7,451) (8,090) (8)%

Depreciation & amortisation (31,789) (3,188) 897%Retail (31,157) (2,455) 1169%Professional Services (632) (733) (14)%

Other operating expenses (37,316) (33,956) 10%Retail (34,686) (32,200) 8%Professional Services (2,630) (1,756) 50%

Total operating expenses (107,548) (74,713) 44%Retail (96,835) (64,134) 51%Professional Services (10,713) (10,579) 1%

Result from continuing operations (before tax) 41,460 81,781 (49)%Retail 35,021 77,040 (55)%Professional Services 6,439 4,741 36%

Cost / income ratios

Cost Income ratio 72% 48%C/I ratio Retail 73% 45%C/I Professional Services 62% 69%

*) The comparative figures for 2007 are the pro forma combined results of BinckBank and Alex, i.e. the reported results of Binck and Alex

are combined.

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Dear shareholders, clients, colleagues and other readers,

I look back with mixed feelings on 2008, our eighth year. BinckBank has achieved what I consider a good result in one of the worst-ever years for the stock market but, not least because of the constant media attention, the credit crisis looks set to continue. Every day, a multitude of experts, professionals, traders, analysts and pundits of every hue give us the benefit of their insights. We at BinckBank have kept well clear of the cameras and speaking platforms – not because we think the financial consumer is not looking for yet another opinion, but because our time is better spent on growing our business and supporting our clients in these difficult times on the stock markets. That is the only way we can prove to shareholders and clients that they can continue to count on BinckBank even in a credit crisis.

2008 was a year of challenges and hard work. But thanks to the unflagging enthusiasm and motivation of our staff and, equally important, the loyalty of our clients, some of whom have had a hard time on the stock markets during these difficult days, it was a successful year. It was gratifying to see former competitors BinckBank and Alex Beleggersbank joining forces to face a new common enemy: the credit crunch. We thank our clients and our colleagues most sincerely for their confidence and dedication.

The adverse stock market sentiment inevitably had a severe impact on our share price, not least because BinckBank falls into the financial and small cap categories. We strive constantly to increase shareholder value, by growing the business – and hence the profit – combined with paying an attractive dividend. Given BinckBank’s strong capital position and as a sign of our commitment to our shareholders, we launched a share buy-back programme in the middle of the credit crunch. In combination with the growth in the business and the rising trend in our financial results, this programme will provide further support for our share price.

BinckBank is focusing on growing the business by maximising client satisfaction, which will expand

both the client base and the transaction volume, thus creating shareholder value for investors in BinckBank. In 2008, for example, we introduced a competitive online savings account, launched our services in France, introduced business process outsourcing (BPO) services, launched Alex Bottomline, developed online Alex Academy training courses to help clients manage risk more effectively and made further improvements to our products and services in response to suggestions from clients. Alex and Binck again received recognition for their efforts in 2008, when they were named best online broker in the Netherlands in several third-party surveys. BinckBank’s adjusted net profit for 2008 was € 64.1 million (€ 0.83 per share). Although the market conditions in 2008 were significantly worse than the year before, the number of account holders increased 37%, from 214,323 at the end of 2007 to 293,236 at the end of 2008. Transaction volume also increased, up 8% to over 7.1 million. There were few financial institutions which were able to match that rate of growth in the client base. BinckBank’s good financial result is partly the product of sustained growth, synergy gains accruing from integration with Alex Beleggersbank and constant focus on cost management.

In conclusion, I would like to address a personal word of thanks to you. At the shareholders’ meeting on 28 April 2009, I shall stand down as chairman, hand over to my intended successor Koen Beentjes and leave BinckBank. Kalo Bagijn, Hanneke Nieuwenhuis, Pim Bertens and I founded BinckBank in 2000 and it has been an intense pleasure working for the growth of the business ever since. It is now time for the organisation to welcome a new generation of Management Board members who can take it forward to the next phase of international expansion. In 2006, Pieter Aartsen assumed responsibility for the new Professional Services business unit. Benefiting from his specific experience in this field, the business unit has grown rapidly, BPO services have been added and new opportunities are being opened up by our best-execution service initiative. At the end of 2007, Evert Kooistra was appointed CFO, a new post which had become increasingly necessary in an environment which is growing increasingly

Chairman’s message

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complex. Nick Bortot, who has been with BinckBank since the beginning and was responsible inter alia for our successful expansion into Belgium, succeeded Kalo Bagijn in May 2008, bringing new plans and an individual management style that suits the size of the Retail business unit. If the shareholders approve, Koen Beentjes will take over from me as Chairman of the Management Board on 28 April 2009. Koen Beentjes is a highly skilled banker who comes to us from ING Direct and has relevant international experience. BinckBank also has experienced, expert and motivated managers in the business units and staff departments. It has been a pleasure to work with this professional team which possess the right mix of skill and enthusiasm to lead BinckBank through a future full of new and significant challenges. In that knowledge, I leave BinckBank with some sadness, but with peace of mind.

Thierry SchaapChairman of the Management Board

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Jan

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10 January BinckBank announces its intention to appoint Evert Kooistra to the Management Board as CFO

28 January Start of BPO services for Friesland Bank

FebruaryBinck named ‘Best broker overall’ by IEX Netprofiler, with Alex in second place

3 MarchBinckBank announces record profit for 2007

6 MayNick Bortot (Retail) and Evert Kooistra (CFO) are appointed to the Management Board by the shareholders and co-founder Kalo Bagijn leaves the company

6 MayAs well as an adjusted net profit of € 17.6 million, BinckBank announces in its first-quarter report that the synergy gains and operational benefits of the acquisition of Alex Beleggers-bank would be greater than expected and would be realised ahead of schedule

30 MayThe last of the trading activities are hived off in a management buy-out and the Trading business unit ceases to exist

24 JulyBinckBank and Optiver announce a joint venture to set up one of the first best-execution service in the Netherlands

SeptemberBinck is awarded the Gouden Stier (Golden Bull) for the best internet broker in 2008 and Alex receives the same award as the best investment institution in 2008

9 SeptemberBinckBank launches its services in France

10 SeptemberAlex starts Alex Academy Online

29 SeptemberBinckBank in Belgium opens 20,000th account

30 SeptemberBinckBank opens share buy-back programme

OctoberBinck and Alex named the best brokers by Beursbulletin

10 OctoberBecause of a sharp fall of share prices many investors start investing; BinckBank announces a sharp rise in the number of new investor accounts

15 October1,000th investor account opened in France

24 OctoberBinckBank posts good third-quarter figures, with an adjusted net profit of € 46.1 million, and announces that as many investor accounts had been opened in the first three weeks of October as in the whole of the third quarter of 2008

DecemberBinck comes top in an online investment survey by Consumentenbond, the Dutch consumer association

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Important events in 2008

Jul25 JulyBinckBank announces the appointment of Koen Beentjes as COO and successor to Thierry Schaap

25 JulyBinckBank announces adjusted net profit of € 31.4 million in its first-half report, despite adverse stock market climate

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ListingBinckBank ordinary shares are traded continuously on NYSE Euronext Amsterdam and have been included since 1 March 2006 in the Amsterdam Midkap Index (AMX), with a weighting as at 31 December 2008 of 2.83% of the index. The ISIN code is NL0000335578 (Reuters: BINCK AS, Bloomberg: BINCK NA). The shares were monitored in 2008 by

analysts at RBS, ING, Fortis, Kempen & Co, Petercam, Rabo Securities, SNS and Theodoor Gilissen Bankiers. The total number of shares in issue as at 31 December 2008 was 76,040,066, with a market capitalisation of € 420 million (2007: € 779 million). Options on BinckBank N.V. ordinary shares have been traded since 21 March 2006.

BinckBank N.V. shares

Figures per share 2008 2007 2006

Profit per share on continuing operations € 0.43 € 0.93 € 0.76 Profit per share on discontinued operations € 0.00 € 0.05 € 0.03 Total profit per share € 0.43 € 0.98 € 0.79 Adjusted profit per share € 0.83

Dividend per share* € 0.41 € 0.21 € 0.30

Net asset value € 6.20 € 6.07 € 2.31 Year-end BinckBank N.V. share price € 5.45 € 10.11 € 11.00 AEX Index 246 516 495

Price/earnings ratio 6.56 10.32 18.56

* Subject to approval by the General Meeting of Shareholders.

Share price and volumes (no.) 2008 2007** 2006**

Opening price € 10.11 € 11.00 € 6.87 Share price – high € 10.23 € 12.53 € 13.13 Share price – low € 4.10 € 9.18 € 6.45 Year-end price € 5.45 € 10.11 € 11.00

Total turnover 90,492,493 86,815,383 94,480,425 Daily turnover - high 2,287,767 3,041,189 2,322,616 Daily turnover - low 24,802 39,670 40,399 Average daily turnover 353,486 332,626 370,511

** Historical prices have been adjusted for the rights issue on 31-12-07.

Key figures for BinckBank shares

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BinckBank share price in 2008

BinckBank’s relative performance is measured against a peer group of international competitors which engage in more or less comparable activities and whose stock market profiles are similar to BinckBank’s. They are Avanza (Sweden), DAB Bank (Germany), Boursorama (France), Comdirect (Germany), E*trade Financial (United States), Nordnet

Securities (Sweden), Optionsxpress (United States), Schwab (United States), Swissquote (Switzerland) and TD Ameritrade (United States). In fifth place in terms of total shareholder return (TSR), BinckBank’s share price performed better than average in 2008, compared with this group.

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2 January 2008:highest intraday quote € 10.23

3 March 2008:FY’07 results: Net profit € 32.2 mln (up 33.9%) 25 July 2008:

H1’08 results: Net profit € 15.5 mln (up 12.4%)

6 May 2008:Q1’08 results: Net profit € 9.7 mln (up 39.6%)

30 September 2008:New share buyback program announced. Target BIS ratio of 15%

24 October 2008:Q3’08 results: Net profit € 22.9 mm (up 7.0%)

10 October 2008:52 week low € 4.10

Volume Share price BinckBank

Peer group index BinckBank

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Share capital

The share buy-back programmeIn a press release on 30 September 2008, BinckBank announced the start of a programme of buying back BinckBank ordinary shares with the aim of reducing the share capital. The target for BinckBank’s capital policy is a solvency ratio (BIS ratio) of between 12% and 20%. As part of its capital policy, it is BinckBank’s dividend policy in principle to distribute 50% of the adjusted net profit as dividend each year. BinckBank’s capital policy also envisages distributing surplus capital to the shareholders, in the form of dividend or by buying back the company’s own shares, if the BIS ratio approaches 20%. With the BIS ratio standing at 16.8% on 30 September 2008, the Management Board decided, with the approval of Stichting Prioriteit Binck, to start a share buy-back programme.

If the solvency ratio (BIS ratio) falls below 15%, the buy-back programme will be temporarily suspended until a sufficient capital buffer has been built up again. Shares are repurchased in accordance with the authority vested in the Management Board by the General Meeting of Shareholders of BinckBank on 6 May 2008. The shareholders will be invited to renew the authority to buy back shares each year.

Implementation of the buy-back programmeBinckBank has entered into an agreement with Fortis Bank Nederland B.V. (‘Fortis’) under which Fortis will implement the buy-back programme independently, i.e. without BinckBank’s intervention, in accordance with the provisions of EU regulation 2273/2003 (safe harbour rules). The Compliance department is monitoring the conduct of the buy-back programme.

In the period from 1 October 2008 to 31 December 2008, BinckBank repurchased 1,024,580 shares at an average price of € 5.39.

Dividend policyBinckBank’s articles of association prescribe that, if and to the extent that the profit permits, a dividend will first be paid on the priority shares equal to 6% of their nominal value (50 x € 0.10 x 6%). The holder of the priority shares ‘Stichting Prioriteit Binck’ will then determine what part of the remaining profit is to be retained. That sum is not distributed to the shareholders, but is added to the company’s reserves.

The profit remaining after the appropriation to reserves by the priority shareholder is placed at the

Share capital 2008 2007 2006

Authorised share capital 100,000,000 100,000,000 100,000,000

Issued share capital at beginning of year 77,093,508 30,837,403 30,837,403

Shares issued during year - 46,256,105 -

Shares cancelled during year - - -

Issued share capital at year-end 77,093,508 77,093,508 30,837,403

Buy back of shares 1,053,442 129,137 253,145

Priority shares 50 50 50

Average shares in issue for year 76,870,870 32,829,886 30,551,278

Year-end market capitalisation (€) € 420,159,619 € 779,415,366 € 452,076,328

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disposal of the General Meeting of Shareholders, which can choose whether to distribute the remaining profit, add it to reserves or a combination of the two. With due observance of the provisions of BinckBank N.V.’s articles of association, dividends may be paid in ordinary shares instead of cash.

The company may not place an amount of profit at the disposal of the General Meeting of Shareholders unless it considers that its capital is adequate. If, with due observance of the foregoing, an amount of profit is placed at the disposal of the General Meeting of Shareholders, the priority shareholder will use its best endeavours to ensure a pay-out ratio of 50% of the adjusted net profit.

2008 dividend proposalThe shareholders will be invited to approve a total dividend for the 2008 financial year of € 0.41 per share (50% of the adjusted net profit for 2008), net of 15% dividend tax. An interim dividend of € 0.20 per share in cash having been distributed in August 2008, the proposed final dividend will be € 0.21 per share in cash. The company will not pay a stock dividend. Subject to the approval of the General Meeting of Shareholders on 28 April 2009, the shares will be quoted ex-dividend from 30 April 2009. The final dividend will then be paid on 6 May 2009.

ShareholdingsSix shareholders have disclosed interests of over 5% as at 31 December 2008 pursuant to the Financial Supervision Act. These are Boron Investments N.V. (9.88%), Delta Lloyd Group (9.41%), Vereniging Friesland Bank (9.40%), J. Kluft (6.11%), Navitas B.V. (5.17%) and Aquiline Capital Partners (5.12%). The free float is 54.91%.

As at year-end 2008, the members of BinckBank’s Management Board held the following shares:- Thierry Schaap : 1,022,995 shares- Nick Bortot : 39,280 shares- Pieter Aartsen : 22,214 shares- Evert Kooistra : 5,768 shares

Shareholders BinckBank

Shares repurchased 25% of average volume past 20 days

Shares repurchased relative to permitted maximum

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volume

Boron Investments N.V. 9.88%

Delta Lloyd Groep 9.41%

Vereniging Friesland Bank

9.40%

J. Kluft 6.11%

Navitas B.V. 5.17%

Aquiline Capital Partners 5.12%

Free Float54.91%

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Investor RelationsBecause it attaches great importance to maintaining a good relationship with investors and analysts, BinckBank endeavours to provide optimum transparency and consistency in its communications. All published documents containing information on BinckBank’s performance, strategy and activities are posted in downloadable form on the website www.binck.com from the date of publication. The Management Board gives regular presentations for analysts and investors. BinckBank also maintains contact with investors and analysts via one-to-one conversations, presentations and conference calls.

The agenda for the Annual General Meeting of Shareholders is posted on the website www.binck.com. Printed copies of the annual report are available from the company on request.

Investor Relations departmentTel: +31 20 522 0372Fax: +31 20 320 4176e-mail: IR@binck.nl

2009 financial calendar

Tuesday 28 April Annual General MeetingTuesday 28 April First-quarter resultsThursday 30 April Ex-dividendTuesday 5 May Record dateWednesday 6 May Dividend payableMonday 27 July Half-year resultsTuesday 28 July Ex interim dividendThursday 30 July Interim dividend

record dateFriday 31 July Interim dividend payableFriday 30 October Third-quarter results

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Vision, mission, strategy and objectives

VisionInternet brokerage: a growing marketThe internet enables private investors to make better-informed choices and makes it easier and quicker for them to invest independently. Internet brokerage offers significant advantages over the more traditional channels (by telephone and/or via an account manager). For that reason, online brokerage is a growing market. This growth is expected to be stronger in the European countries south of the Netherlands.

The internet is changing competitive relationships and places the client firstThe internet has also changed the relationship between new and existing providers, enabling new players to set up in business at relatively low cost and compete with the established players. Comparison websites make it easier for consumers to find and compare products and services from new and existing players, which they can discuss in online newsgroups. This helps consumers to make rational choices based on price, quality or a combination of the two, rather than choices based on brand name. In our view, the image of a company is thus no longer defined solely by its marketing campaigns and is increasingly being determined by consumer experience that is published on the internet. Client satisfaction will therefore become an increasingly significant factor in companies’ future growth.

Internet brokerage is a high-volume low-price price business (economies of scale)We envisage growing consolidation among providers of online brokerage in Europe in the medium term, with larger players making more cross-border acquisitions, as some French and German players have already done on a smaller scale. The reason is simple: higher transaction volume (bigger scale) will ultimately help to reduce the cost per transaction, which is essential to long-term competitiveness. A similar trend has already been experienced on the more mature US online brokerage market.

MiFID will change the relationship between stock exchange, liquidity provider and brokerThe introduction of MiFID (Markets in Financial Instruments Directive) will change the relationship between stock exchange, liquidity provider and broker in the future. The requirement to execute orders at best price will result in the creation of alternative trading platforms and alliances between those parties.

Private clients want a bank that places the customer firstNow that the financial establishment has seriously betrayed his confidence, the private financial consumer is looking for reliable providers of transparent services who place the client’s interests first ahead of their own.

All private banks are looking to outsource securities administrationBecause the processes involved in the execution and administration of securities transactions are often expensive and labour-intensive for banks, we expect them to seek to reduce their costs by increasingly outsourcing this work or using new software. Another cost-raising factor is the increasing regulation, creating an ever more complex environment which requires changes to their systems and processes. Mission BinckBank seeks to maximise shareholder value by maximising customer satisfaction.

StrategyWe aim to constantly surprise our clients with the high quality of our product, our intensive client focus and our low prices. This has our highest priority at all times, because we want our clients to be ambassadors for our services and so help our client base to grow (25% of new clients opening an account with Binck have been introduced via an existing client). By focusing on achieving the highest possible client satisfaction and thus growing our client base, we are creating shareholder value for the investors in BinckBank.

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Our ambition is to be the largest European full-service online bank for investors. Our strategy is built on five pillars:I Further growth in our existing services, based on a

financially scalable business model (transaction gathering with fully automated processing of transaction streams)

II Expansion of our banking activities within the investment universe (online bank for investors) and BPO activities within the Professional Services division

III International expansion driven by aggressive pricing and comparative advertising, followed later by broadening of the product range

IV Constant cost controlV Financially conservative solvency and liquidity

policy, aimed at steady profit growth

ObjectivesOperational objectivesOur objective for the Retail business unit is to retain our market leadership in online brokerage in the Netherlands and grow into the largest European full-service online bank for private investors. We plan to do this by improving our products and broadening our product range. Our extended product range will include additional services for investors, such as;- online saving- online advice and asset management- deployment of our distributive power and- an investment fund supermarket

Our ambition for the Professional Services business unit is to attain market leadership in services to asset managers in the Netherlands and Belgium, while growing our services to banks both by insourcing securities order execution, securities administration and securities-related payments (business process outsourcing) and by licensing software. We also intend to develop our presence in the securities transaction execution chain with our new best-execution services initiative.

Our strategy envisages expansion of our services within Europe.

Financial constraints on strategyWe seek to achieve steady growth in earnings per share while pursuing a very conservative capital policy.

The development of our earnings per share depends to some extent on developments on the financial markets. While this is a variable over which we essentially have no influence, we can reduce that dependence by focusing on variables we can affect, by growing our client base, applying rigorous cost control and broadening our product range and BPO services.

In difficult market conditions, we shall choose profitability support over short-term growth. Consequently, the marketing budget will be largely

I - Further growth existing services

Shareholder Value

V - Conservative financial policy

IV - Constant Cost control III - International

Expansion

II - Expanding activities within investment

universe

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variable and will move with the financial results we achieve.

The objective in our capital policy is a solvency ratio of at least 15% and a secure liquidity position. Surplus capital will be returned to shareholders in dividend and via the share buy-back programme.

TargetsOur medium-term (2–4 years) targets are:

Position as at 31 December

20081. 275,000 Dutch investment

accounts 202,7872. 40,000 Belgian investment

accounts 22,4863. 20,000 advice and asset

management accounts 8,1364. total savings deposits of

€ 1.5 billion € 861 million5. total client assets of € 10 billion € 6.1 billion6. break-even level in France

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StrengthsThe quality of BinckBank’s services and products has been rated highly by clients and research bureaus over the years and the Alex and Binck labels are acknowledged as strong brands. BinckBank has more experience in online brokerage than any other institution in the Netherlands and has secured a very strong market position. Benefiting from this experience, it is well equipped to set up local, country-specific services outside the Netherlands, as it has already done in Belgium and France. Thanks to its constant focus on costs and careful planning of its European expansion, BinckBank has a low cost base. At the financial level, BinckBank’s business model is highly scalable, translating extra revenue into rising profits.

WeaknessesThe corollary of the financial scalability of the BinckBank business model is a mainly fixed cost base. When transaction volume is increasing, that is a significant advantage, but there is little room for correction if transaction income falls. The business is still largely dependent on transaction income, which in turn is affected by conditions on the financial markets. BinckBank’s market capitalisation and low share price may make it vulnerable to takeover. The current capital base does not allow sufficient scope for acquisitions.

OpportunitiesThere is scope for expansion in BinckBank’s current services and the company is well placed to achieve international organic growth in Europe. Because many major banks do not consider online brokerage to be part of their core business, there are good opportunities for these services in Europe. The same applies to BPO services. The best-execution project in conjunction with Optiver offers the prospect of further reductions in the cost per transaction (stock exchange charges).

ThreatsA protracted recession triggered by the credit crunch represents the greatest threat to BinckBank today, because sustained negative market sentiment may impair the propensity to invest and distort conditions on the money market. Increased competition and heavier pressure on prices also represent a threat. There may be some risk of failure of the IT integration project and related integration of front-office and back-office processes and failure to grow the business in France. Lastly, at the more general level, there is always an operational management risk in a fast-growing business such as BinckBank.

Strengths, weaknesses, opportunities and threats

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Re p o r t o f t h e M a n a g e m e n t B o a r d

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Review of 2008BinckBank’s focus in 2008 was again on providing the best possible services for existing clients on very attractive financial terms and growing our client base. We worked on integrating Alex Beleggersbank, making the organisation more manageable, introducing our BPO services, launching our services in France and growing our Belgian operation. We also withdrew completely from equities trading for own account last year, which further lowered the company’s risk profile and allowed us to focus more management attention on the growth of the Retail and Professional Services business units. Our subsidiary Syntel again made a very useful contribution to the result in 2008. At the same time, we were of course working hard to manage the effects of the credit crisis on BinckBank.

With the acquisition of Alex Beleggersbank, BinckBank has more than doubled in size. To integrate the two organisations and create a new basis for manageable growth in the future, many changes and improvements have been made at the organisational, financial, operational and human resources level. For example, we invested in 2008 in improved and expanded management information, a new financial administration system, IT fall-back facilities and staff quality, with the aim of building a strong foundation for future growth. As for our progress in broadening and improving our product range, we introduced online saving and BPO services, developed the French operation and launched the online Alex Academy. The web version of the Alex Academy enables us to reach a far wider audience.

The MiFID regulations which came into effect at the end of 2007 have opened up the possibility of establishing market places that offer a good and cheap alternative to the existing stock exchanges. BinckBank intends to avail itself of that opportunity in the future and signed an agreement with leading trading house Optiver in July, setting up a joint venture to provide a best-execution service. This service will be introduced in the course of 2009. By utilising available third-party technology and the existing expertise and skills of its joint venture partner, BinckBank will be able to offer even better execution of client orders. As well as complying fully

with the MiFID guidelines, this initiative will generate substantial cost savings for the company in the future and hence further strengthen its competitive position.

With the world transfixed by the credit crunch and reports from many financial institutions talking of nothing but losses, BinckBank posted a strong adjusted net profit of € 64.1 million (€ 0.83 per share) in 2008. This reflected the sharp rise in the number of new brokerage accounts, the fact that existing BinckBank clients continued to trade actively in volatile markets and the (cost) synergy gains accruing from the acquisition of Alex Beleggersbank. The € 64.1 million includes integration expenses of € 4.6 million and a positive contribution of € 0.1 million from discontinued operations. By way of comparison, adding together Alex Beleggersbank’s 2007 net profit (€ 34.6 million) and BinckBank’s 2007 net profit (€ 32.2 million including a non-recurring tax benefit of € 4.3 million and a positive contribution from discontinued operations of € 1.6 million) gives a pro-forma combined net profit for Alex and Binck of € 66.8 million. On that basis, net profit in 2008 was € 2.7 million (4%) lower. After adjustment for these non-recurring effects, the pro-forma net profit was € 68.6 million in 2008 and € 60.9 million in 2007, an increase of € 7.7 million (13%) in 2008.

Because BinckBank specialises exclusively in securities-related services and pursues a very conservative investment policy, no impairments needed to be made on the investment portfolio in 2008. BinckBank’s sound capital position enables it to pursue a dividend policy under which 50% of the adjusted net profit is distributed each year as dividend and to buy back shares. A total of 1,024,580 BinckBank shares were repurchased in 2008. The repurchased shares will be cancelled, which will reduce the issued share capital.

2008 also brought changes in the composition of the company’s Management Board. Co-founder Kalo Bagijn stood down at the shareholders’ meeting on 6 May 2008 and was succeeded by Nick Bortot. Evert Kooistra was appointed to the Management Board as CFO at the same meeting. The present chairman and

Report of the Management Board

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co-founder Thierry Schaap is to step down at the coming shareholders’ meeting and will be succeeded by the present COO Koen Beentjes, subject to the shareholders’ approval. The Management Board is confident that, in its new composition including incumbent member Pieter Aartsen, it is well equipped to lead BinckBank to further successes in the future. The remuneration of the members of the Management Board in 2008 is explained in the context of the remuneration policy discussed on page 79 et seq of this annual report.

Although, compared with 2007’s avalanche of changes (including Wft, MifId, IFRS and Basel II), 2008 was a relatively quiet year for new legislation and regulations, the Finance & Control department still had to work hard to keep abreast of the changes, most notably in relation to IFRS and Basel II. Since acquiring Alex Beleggersbank, BinckBank finds itself in an increasingly complex environment.

BinckBank is exposed to various risks in the course of its activities. To identify and monitor these risks, BinckBank performs an annual risk analysis. The identification of risks and the implementation and modification of the relevant control measures is a continuous process within BinckBank. More information on risk management at BinckBank and the extent to which BinckBank’s Management Board is in control can be found in the sections entitled ‘Risk management under Basel II and Pillar III disclosure’ on page 32 and ‘In control statement’ on page 52 of the annual report.

In accordance with the company’s dividend policy, the General Meeting of Shareholders on 28 April 2009 will be invited to approve the distribution of a final dividend of € 0.21 in cash. Assuming that this proposal is approved by the meeting, the dividend - net of 15% dividend tax - will be paid to holders of BinckBank N.V. shares on Wednesday, 6 May 2009. BinckBank N.V. shares will be quoted ex-dividend as from Thursday, 30 April 2009.

BinckBank and the credit crunch After almost two years of the credit crisis and many bank failures, BinckBank has continued to prosper. BinckBank has never invested in toxic bonds (a generic term for bonds secured on doubtful collateral, such as sub-prime mortgages), does not need to take impairments on the investment

portfolio and does not require refinancing. The credit crisis is having little effect on BinckBank’s conservatively invested portfolio or its solvency.

Unfortunately, the ravages wrought by the credit crunch on the financial markets will affect BinckBank indirectly, through no fault of its own. The crisis, for example, had repercussions for the interest rate structure on the money market and investor sentiment on the stock exchanges. But the credit crunch also created opportunities: 2008 brought explosive growth in the number of BinckBank’s brokerage clients, who saw opportunities in the historically low prices. With governments and regulators working together to find solutions to the current financial problems, we are hopeful that the markets will stabilise again.

Alex Beleggersbank: acquisition, integration and synergy gainsIn the knowledge that the Alex Beleggersbank acquisition would be officially completed at the end of 2007, an integration plan was drawn up immediately after the acquisition was announced in October 2007, so that the integration work could start as soon as the transaction was finalised. This work included reinvesting Alex Beleggersbank’s client assets, setting up a new organisational structure, retrieving certain activities which Alex Beleggersbank had outsourced to Rabobank, relocating and integrating personnel departments, harmonising the employment terms of staff with Alex Beleggersbank employment contracts (based on the Rabobank collective labour agreement) and those with BinckBank contracts, integrating processes and systems and adjusting/clarifying the positioning of the Alex and Binck labels.

Alex Beleggersbank’s assets under administration of € 1.2 billion were combined with BinckBank’s assets under administration on 31 December 2007 and reinvested in the first six weeks of 2008 in accordance with the BinckBank investment strategy. The integration plan envisaged rapid integration of the personnel within 100 days, counting from 2 January 2008, in order to provide clarity for all employees regarding their jobs and reporting lines within the new organisation and BinckBank’s strategy. We felt that rapid integration at the human resources level was vitally important to minimise internal disquiet. The new organisational structure

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and location policy were announced internally on 1 February 2008 and were fully implemented on 1 April and in early May, respectively. The new management cadre consists of a mix of BinckBank and Alex Beleggersbank staff. The main processes that had been outsourced to Rabobank were brought back in-house in the first half of 2008, generating substantial synergy gains. As regards harmonisation of terms of employment, a large number of staff were transferred to standard BinckBank employment contracts in the course of 2008. A new incentive scheme was also introduced for a number of key executives and agreement on compensation was reached at the end of 2008 with staff who, under their contracts of employment, were covered by the Rabobank collective labour agreement until the end of May 2009. Various processes and systems were also integrated in 2008. The most important of these projects was the integration of BinckBank and Alex Beleggersbank financial administration. The BinckBank and Alex Beleggersbank IT platforms will be integrated in 2009 and 2010. A campaign was launched to reposition the Alex and Binck labels in early 2009, profiling Alex as an online bank for investors.

When appointing managers to populate the new organisational structure, we applied the ‘best man for the job’ principle, recognising that Binck had proved in the past to be more effective in marketing and sales, while Alex Beleggersbank had been stronger in process organisation and structuring. By taking these attributes into account in the integration process, we now have a good mix of BinckBank and Alex Beleggersbank managers in key posts, thus preserving the best of both worlds. This process inevitably resulted in a small number of redundancies among staff whose jobs were duplicated. Other jobs were lost due to the changes in the organisational structure, new corporate strategy and the physical relocation of a large number of staff. This exercise, which involved fewer problems and took less time than expected, has resulted in a robust organisational structure. In parallel with technical integration, there is scope for further process integration. These exercises will generate more cost savings and raise the quality of service to an even higher level.

The synergy gains reflected in the revenues for 2008 relate to the higher returns on the Alex assets under

administration and the lower stock exchange and clearing expenses consistent with the larger combined BinckBank and Alex Beleggersbank transaction volume. Gains in terms of operating cost reductions in 2008 took the form of slower growth in staff costs, lower other administrative expenses due to the termination of contracts with external advisers and consultants, lower marketing costs thanks to more efficient planning and organisation campaigns and a reduction in other expenses reflecting higher quantity discounts on purchases consistent with the increased scale of the new organisation. We expect to achieve IT savings in 2010 and beyond. At the time of the acquisition, synergy and operational gains were expected to total € 18–20 million from 2010 onwards. Because the integration process has been easier and has progressed faster than originally expected, the gains have been higher and have been realised earlier. When an analysis of the synergy and operational gains was published in the half-year report, the expected gains as from 2010 were adjusted upwards, from € 18–20 million to € 22–26 million. We do not intend to publish figures on synergy and operational gains in future because, as the integration of Alex Beleggersbank into BinckBank progresses, they will become increasingly difficult to identify (more arbitrary).

On 31 December 2007, when it acquired Alex Beleggersbank’s activities, BinckBank valued Alex Beleggersbank’s identifiable assets and liabilities at fair value. The goodwill recognised on acquisition, which amounted to € 142.9 million, consists mainly of the value of the growth in the client base and the synergy gains that will accrue when the integration process has been completed. The goodwill is tested annually or more frequently (whenever indicated) for impairment. There were no impairment losses in the 2008 financial year.

The following intangible assets were categorised at that time as income-generating assets arising from the acquisition: 1) the Alex trade name (net carrying amount as at 31/12/08: € 25.1 million) 2) the client base (net carrying amount as at 31/12/08: € 118.5 million) 3) the assets under administration (net carrying amount as at 31/12/08: € 75.7 million) and 4) software developed by Alex in-house (net carrying amount as at 31/12/08: € 1.6 million). All these intangible assets were tested for impairment in 2008, paying particular attention to any indicators of

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impairment loss, and the net realisable value of the intangible assets was compared with the net carrying amount as at 31 December 2008. These tests showed that no impairment loss had been sustained.

Integration costs of € 4.6 million were recognised in 2008. These consisted mainly of staff costs, partly in connection with redundancies to eliminate duplication, and fees paid to external consultants who assisted with the integration process. No further specific integration costs are expected in 2009.

RetailThe Retail business unit provides online brokerage services for independent private investors in the Netherlands, Belgium and France. It provides these services in the Netherlands under the Alex and Binck labels and in the other countries under the Binck label only.

The Retail business unit’s primary focus is on achieving the highest possible client satisfaction (amazing our clients with the quality of our services) and the fastest possible growth in our client base. In 2008, the business unit was occupied at the same time with the integration of Alex Beleggersbank, the resultant expansion of the product range and the launch of BinckBank’s services in France.

BinckBank conducts regular surveys to measure its name recognition and perceptions of its services. The annual name-recognition survey which BinckBank commissions from TNS NIPO1 came up with a notable finding in 2008: Alex and BinckBank scored significantly higher than the major banks for both ‘top of mind’ (‘what is the first name that springs to mind?’) and for spontaneous name recognition (‘which other names do you know?’). BinckBank also conducts a monthly survey of its own client base to measure client satisfaction2. According to the latest figures, satisfaction among Alex and Binck clients is very high at 8.1. BinckBank also monitors client satisfaction using the net promoter score method, which shows the ratio of promoters (satisfied clients) to detractors (dissatisfied clients). As in previous years, the net promoter score for 2008 was high, from which we may conclude that a large percentage of BinckBank clients would recommend our services to friends and colleagues.

As well as its own surveys, the Alex and Binck labels also strive to achieve the highest possible scores in surveys by independent third parties. Both labels were again named as the best and cheapest online brokers in the Netherlands in several polls in 2008. The result of this year’s survey by Consumentenbond, the Dutch consumer association, was particularly gratifying: Binck came top with a score of 9.2 points, beating ten other banks and brokers.

1 TNS NIPO, January 2009

2 BinckBank client survey, December 2008

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BinckBank witnessed unprecedented growth in the number of account holders in 2008. We started the year with 206,933 accounts, of which 23,560 were savings accounts. As at year-end 2008, BinckBank had 284,709 retail accounts, of which 56,745 were savings accounts, representing growth of 38% and 141%, respectively. Comparing 2008 with previous years, it is clear that the growth in new account holders in absolute numbers is accelerating year on year. This growth has taken place despite significantly lower marketing expenditure for BinckBank and Alex Beleggersbank combined in 2008 (€ 10.6 million) than in 2007 (€ 13.5 million). The accelerating pace of growth is due partly to investors opening accounts on the recommendation of existing clients and partly to the low prices in the second half of the year, which prompted many investors to enter the market. BinckBank was also successful in raising Alex’s rate of converting potential investors into actual account holders to the BinckBank level, through better management of the sales department.BinckBank’s strategy was revised after the acquisition of Alex Beleggersbank. The acquisition enabled us to expand our range of services via the Alex label,

providing a strong foundation from which to pursue our ambition to be the leading European full-service online bank for investors. Additions to the range included an online savings account and online investment advice and management services. At the same time, we sharpened our focus on providing investment funds, utilising our distributive power and making essentially all services ultimately suitable for international deployment.

As part of our drive to expand the product range, we introduced an online savings account under the Alex label in 2008. Then, however, the savings account was only offered to clients with an investment account. The interest rate was raised in the first quarter of 2008 to make the savings account more attractive and in March 2008 the savings account was launched as a stand-alone product, supported by a national marketing campaign. This proposition generated a large number of new savings account holders. With marketing effort targeted on this specific group (cross-selling), we expect to be able in due course to persuade some of these clients to open an investment account.

Retail 2008 2007* Difference %

Customer accounts 284,709 206,933 38%Netherlands 259,358 193,376 34% Brokerage accounts 194,477 162,357 20% Saving accounts 56,745 23,560 141% Investment advice and management accounts 8,136 7,459 9%Belgium 22,269 13,557 64% Brokerage accounts 22,269 13,557 64%France 3,082 - 100% Brokerage accounts 3,082 - 100%

Transaction volume 6,807,997 6,335,000 7% Netherlands 6,226,719 6,001,572 4% Belgium 560,335 333,428 68% France 20,943 - 100%

Funds entrusted (€) 5,001,484,037 6,855,821,000 (27)%Netherlands 4,593,797,617 6,427,559,000 (29)% Brokerage accounts 3,605,442,599 5,630,504,000 (36)% Saving accounts 861,239,541 624,629,000 38% Investment advice and management accounts 127,115,477 172,426,000 (26)%Belgium 389,201,440 428,262,000 (9)% Brokerage accounts 389,201,440 428,262,000 (9)%France 18,484,980 - 100% Brokerage accounts 18,484,980 - 100%

*) The comparative figures for 2007 are the pro forma combined results of BinckBank and Alex, i.e. the reported results of Binck and Alex

are combined.

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Competition for savings intensified sharply in the Netherlands in the third quarter. In an effort to capture as much of the savings market as possible, several banks started offering unprecedentedly high interest rates: finding it difficult to borrow money owing to the credit crunch, they went hunting for private savings to fund their credit portfolios. Other banks – assisted by the trend on the interest rate market – were offering high-interest time deposits with very short maturities. In the third and fourth quarters, some savers used part of their capital to invest in the stock market, where prices were by now sharply lower. The combination of increased competition and withdrawal of savings for investment purposes translated into a decrease in savings deposits in the second half of the year, despite the rapid growth in the number of savings account holders. Lower priority was given to marketing for our online investment advice and management services in 2008, but we aim to address this aspect again in 2009. Existing account holders using these online services continued to benefit from the high quality of the product. Work also started in 2008 on growing BinckBank’s share of the investment fund market, supported by an advertising campaign. Both the online investment advice and asset management services and the investment fund supermarket will help to broaden the product range.

More use was made in 2008 of BinckBank’s distributive power. BinckBank’s account holders represent an attractive target group for many financial services providers. Because BinckBank clients always have complete freedom of choice of products, via the Alex and Binck investment sites, BinckBank maintains its independence. In 2008, for example, we entered into a cooperative venture with ING for the distribution of Sprinters, a product similar to ABN AMRO’s Turbos and Commerzbank’s Speeders. BinckBank receives recurring income via the capital that clients hold in Sprinters. We intend to make even greater use of our distributive power in future. As a result of this campaign 190,000 free Sprinters transactions were executed in 2009, which is expected to end 1 May 2009. BinckBank expects additional recurring income amounting to € 1–2 million as a result of the Sprinter transactions in addition to regular commission income on transactions.

The historically low prices have attracted a new group of investors, alongside the highly active and buy-and-hold investors. These are financial consumers who have not invested before, but see the current low prices as a good opportunity to enter the market. Through the Alex Academy, Alex helps these clients make their new investment decisions and teaches them to manage the risks associated with investing. To supplement the traditional courses provided by the Alex Academy, an online version was launched in the second half of 2008 in order to reach a wider public.

The Belgian business is developing well. The number of brokerage accounts in Belgium grew from 13,557 to 22,269 in 2008 and the total number of transactions executed rose from 333,428 in 2007 to 560,335 last year. We intend to wait with the launch of a savings account in Belgium until conditions on the money market stabilise. The first steps in that direction have been taken in the form of action by the Belgian Ministry of Economic Affairs at the end of 2008 to cap the extremely high interest rate. Other products developed with a view to expanding the product range under the Alex label will be added progressively to the range offered in Belgium, taking full account of system integration and local competitive relationships.

The launch of the French services was successful. As in the Netherlands and Belgium, we are competing with the established order with aggressive pricing and comparative advertising campaigns, which have attracted considerable interest among French investors. By attuning our services fully to the needs of the French market, we have created a product that is attractive to the French online investor. As at year-end 2008, BinckBank had 3,082 French private investors as account holders.

Via the Alex branch in Spain which BinckBank acquired with Alex Beleggersbank, we are focusing – under the Alex label – on Dutch expatriates living in that country. In the near future, Alex in Spain will be turning its attention to Belgian expatriates.

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Professional ServicesThe Professional Services business unit provides services for asset managers and banks.

The business unit provides online services for asset managers, including bank accounts for the latter’s clients (tripartite accounts) who have placed assets with the asset manager. The services also include execution and administrative processing of securities transactions and related cash streams. BinckBank can thus take care of all aspects of securities administration for asset managers and their tripartite clients. Asset management clients are able to monitor all transactions in their portfolios fully online. This BinckBank proposition is unique in the Netherlands and by far the cheapest on the market. Our competitors are old-established and/or fashionable names, which are considerably more expensive, offer fewer online facilities and/or are less specialised in these services because they are not a priority. BinckBank is able to set itself apart from the competition in this regard and is attracting a growing number of asset managers, with the result that the number of underlying tripartite clients is also growing steadily. Because the asset manager has to form a bond of trust with BinckBank as well as entering into a commercial agreement, it generally takes some time to finalise the contract and actually to switch the underlying tripartite clients. As at year-end 2008, Professional Services had 75 asset management clients in the Netherlands, representing 8,310 private investors and € 991.4 million in client assets. It is estimated that there are around 100 asset managers in the Netherlands.

BinckBank started offering these services in Belgium at the end of 2007 and invested considerable effort in 2008 in matching them more closely to the needs of the Belgian market. The services for Belgian asset managers were launched, in fully bilingual form, in mid-2008 and 22 asset managers, representing 217 underlying tripartite account holders and client assets of € 73.0 million, have since become clients. BinckBank’s competitive position in Belgium is even stronger than in the Netherlands, with the more marked price difference, our distinctive online services and our specialised focus working in BinckBank’s favour. The competition in Belgium consists of a relatively large number of players which do not regard these services as a core activity. In our

view, the competing services in Belgium are poorly automated and expensive.

Although Belgian asset managers also take time to build trust before committing themselves to a relationship with BinckBank and becoming active, good growth was recorded in the second half of 2008.

Professional Services is continuing to grow strongly despite the adverse market conditions. In these difficult times for the stock market, the lower prices have reduced the value of the client assets placed with many asset managers, and this directly affects the value of the assets they have placed with BinckBank. However, the strong growth in the number of new clients means that the assets still exceed € 1 billion.

Professional Services is aiming for market leadership in the Netherlands in the medium term (2–4 years) and in Belgium in the longer term (over 4 years).

Following the acquisition of Syntel, BinckBank started providing services for banks in 2006. In cooperation with BinckBank, Syntel expanded its business selling securities-related software to banks in 2007 with the addition of business process outsourcing (BPO) services. BinckBank can execute and settle securities orders for the bank and provide a complete range of fully automated securities administration and related banking administration services. These services differ from those provided for asset managers in that they are kept off BinckBank’s balance sheet: BinckBank only administers the cash and securities of customers of the BPO client. BinckBank’s target market is small to medium-sized banks. Dutch banks are showing considerable interest in BinckBank’s BPO services as a means of delegating the technically complex and often expensive securities process. Because signature of the cooperation agreement with the bank is preceded by intensive and often protracted preparations, only a small number of new clients can be added to the platform each year. Building on the successful start of the BPO services to Friesland Bank in early 2008 and given the progress achieved in integrating Alex Beleggersbank in 2008 and the fact that competition in securities BPO services has weakened, BinckBank will endeavour to sign up new BPO clients from the second half of 2009 onwards.

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Our subsidiary Syntel had another successful year in 2008, with revenues and profit higher than in 2007. Syntel focused in 2008 on further improvements to the BPO software, to enable more new clients to be helped in the years ahead. Syntel also worked in 2008 on upgrading its Europort+ back-office product. Much time was spent on the investor giro module, which enables trading in investment funds, including trading periodically in fractional units for clients. The investor giro module was implemented at two banks in 2008. Syntel also worked on improving performance and extending functionality. By parallelising processes and using a modern infrastructure, EuroPort+ can now process over 100,000 transactions an hour. In product development, Syntel invested time and effort in EuroFront, an internet application interfacing with the back-office software. New modules were developed, including online ordering and payment modules, and real-time and streaming market data were integrated. A start was also made in 2008 on the development of a user-friendly investor giro interface.

Recent events and outlookDespite the adverse market conditions in 2008, BinckBank has continued to grow in terms of client base and number of transactions executed and has remained highly profitable, which strengthens our confidence in the future. Our targets are unchanged, except our target for the Dutch market which we have raised from 200,000 to 275,000 brokerage accounts in the medium term. More information on our objectives is given on page 17 of the annual report, under the heading ‘Vision, mission, strategy and objectives’.

BinckBank’s future performance will of course depend on developments on the financial markets. Opinions vary widely as to the likely duration of the credit crunch. Positive scenarios envisage the market stabilising in 2009 and staging a cautious recovery thereafter, while negative scenarios predict a protracted depression. In the latter case, the company’s commission income would inevitably be affected. BinckBank’s management will therefore continue to focus on cost control/reduction, sustained organic growth in all the countries in which BinckBank has a presence and the generation of more commission-independent revenue, such as interest income, asset management and investment advice fees and income from the distribution of third-party products. A good example of the latter is the cooperation agreement that BinckBank entered into with ING in 2008 for the distribution of Sprinters. The launch of an ‘investment fund supermarket’ is also planned for 2009, which will give our clients a choice not only of securities but also of a wide range of investment funds. As well as commission income, these services will earn fees from the providers whose products we distribute. The aim is to generate income in the future that is less dependent on the stock market climate. Conditions on the money market at present do not favour sustained strong growth of our savings product under the Alex label. However, when the money market returns to normal, we shall be well placed to benefit, given our low-cost structure, and our target for savings deposits therefore remains unchanged at € 1.5 billion.

Professional Services 2008 2007 Difference %

No. of acount holders 8,527 7,390 15% Netherlands 8,310 7,292 14% Belgium 217 98 121%

Transaction volume 343,247 265,000 30% Netherlands 333,950 262,869 27% Belgium 9,297 2,131 336%

Funds entrusted (€) 1,064,368,503 1,309,984,000 (19)% Netherlands 991,394,193 1,285,713,000 (23)% Belgium 72,974,310 24,271,000 201%

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The bad start made by the equities markets in 2009 impacted on BinckBank in the form of lower commission income in the first two months of the year. The free Sprinter transactions will temporarily lower the average income per transaction. Uncertainty as to the duration of the unstable market conditions make it virtually impossible to give a reliable revenue forecast, but BinckBank expects continued growth in its client base in 2009 with only a very limited increase in costs.

At the end of January, part of the öffentliche Pfandbriefe in the investment portfolio were sold at net book profit of over € 3 million. The risk premiums for all asset classes have risen sharply in the past period, which means that returns on bank bonds, for example, are relatively very high at present. BinckBank takes the view that the current return on and risk profile of loans of this kind are sufficiently attractive and are consistent with BinckBank’s conservative investment policy. Part of the current investments maturing in 2009 will therefore be invested in this paper, up to a maximum of 20% of the investment portfolio. The investment policy regarding the remaining 80% will be unchanged.

The Retail business unit’s focus in 2009 will be on further growth in the current activities, broadening the product range (including repositioning Alex as an online bank for investors) and raising the pace of international expansion through development of the services in France.

The objective for Professional Services is to grow to market leadership in the Netherlands and Belgium in services for asset managers. Professional Services will continue to develop as a recognised leader in the delivery of BPO services, to which end it will seek to conclude new BPO contracts in 2009 and 2010. Syntel is expected to make a positive contribution to the result again in 2009 and to continue on the growth path on which it embarked in 2008. We have high hopes of the best-execution service project we are working on in conjunction with Optiver.

We expect the best-execution service platform to come on stream in mid-2009. Although the platform will require initial investment and will incur start-up losses, it is expected to result in lower costs per transaction. We expect the best-execution service initiative to be cost neutral in 2009.

After the end of 2008, the company has sold its 35% interest in Florint B.V. (the former bond trading activities).

A start will be made in 2009 on integrating the BinckBank and Alex Beleggersbank platforms by creating a hybrid system which retains the best applications of both systems. Alex and Binck investing clients will not be inconvenienced by this exercise. Although the system integration project and related establishment of new data centres will require a substantial investment in 2009, it will yield significant cost savings in 2010 and beyond.

To safeguard the company’s controllable growth while continuing to guarantee the best services to our clients, investments will be made in the company’s infrastructure in 2009, including the integration of the BinckBank and Alex Beleggersbank platforms as described above. The company expects to make investments in property, plant and equipment of € 10–12 million in 2009, which can be funded from BinckBank’s own resources.

Although the current market conditions will slow the process, BinckBank expects consolidation among online brokers on the European market similar to that experienced on the US market. BinckBank will therefore continue to pursue organic growth, but will investigate any opportunities for acquisitions in Europe which may arise. If BinckBank needs additional equity to finance an acquisition, we shall consult with our shareholders and seek their approval.

Statement pursuant to Section 5, subsection 25c, of the Financial Supervision Act (Wft)

The Management Board hereby affirms that, to the best of its knowledge and belief:

1) the annual report included on pages 1 to 86 gives a true and fair view of the course of business during the 2008 financial year of BinckBank N.V. and the related enterprises of which the data are included in its financial statements and that the material risks to which BinckBank is exposed are described in the annual report.

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2) the financial statements included on pages 87 to 165 give a true and fair view of BinckBank N.V.’s financial position as at 31 December 2008 and of the result and cash flows in 2008, in accordance with the International Financial Reporting Standards as endorsed for use in the European Union and with Title 9 of Book 2 of the Netherlands Civil Code.

ConclusionIn conclusion, we address a word of thanks to our shareholders and clients for the support they have given us in the past year. Falling stock markets made 2008 a painful year for most investors, and thus BinckBank’s shareholders and clients. We hope the market will improve in 2009. We shall spare no effort to continue growing the business and continue amazing our clients with the quality of our services. We also take this opportunity to thank all our staff, with whose help rapid progress has been made with the integration project (the repercussions of which for human resources are discussed in the section entitled ‘Personnel and organisation’) and whose commitment, knowledge and expertise were instrumental in BinckBank’s success in 2008.

Amsterdam, 6 March 2009

Thierry Schaap, Chairman of the Management BoardPieter Aartsen, Member of the Management BoardNick Bortot, Member of the Management BoardEvert Kooistra, Member of the Management Board

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1. Introduction

Basel II explained The Basel II banking industry guidelines introduce new capital adequacy requirements for banks. The purpose of the Basel II capital accord is to provide guidelines for banks to determine the minimum capital they have to set aside to cover unexpected losses arising from the fi nancial and operational risks. Basel II was developed by the Basel Committee on Banking Supervision, consisting of representatives of central banks and regulatory authorities of 13 countries, which meets regularly in Basel, Switzerland. The guidelines were adopted in the European Union in the form of the CRD (Capital Requirements Directive), 2006/48/EC and 2006/49/EC. Almost all the EU Member States have now implemented the guidelines in their national legislation. In the Netherlands, this takes the form of the Financial Supervision Act (Wet fi nancieel toezicht or Wft) and subsidiary regulations.

The importance of capitalBanks are exposed to various risks in their day-to-day operations, expressed as the probability of a given event resulting in a loss to a bank. Banks need to hold capital to cover potential losses in the case of an extremely negative scenario so that, when they are faced with such losses, they are still able to pursue their activities.

Three pillarsBasel II is built on three pillars, which banks have to implement in their entirety:• Pillar I: minimum capital requirements• Pillar II: supervision• Pillar III: market discipline

Pillar I provides guidelines for calculating the minimum capital requirement which the regulator requires a bank to meet for credit, market and operational risk. Basel II gives banks the choice of a number of methods for calculating the minimum capital requirement, ranging from the relatively simple to the extremely advanced. Pillar II provides additional guidelines for assessing a bank’s capital adequacy on the basis of bank-specifi c scenarios. The bank is required to calculate the minimum capital that it considers adequate to cover all the risks to which it is exposed, not just the standard risks under Pillar I. This is generally referred to as the ‘ICAAP capital’ (Internal Capital Adequacy Assessment Process). The ICAAP capital is then compared with the bank’s actual capital. Banks are required to hold adequate capital at all times, on the basis of the ICAAP capital. Pillar II also provides guidelines for regulators for assessing a bank’s capital management. Pillar III gives guidance for external reporting of the risks to which a bank is exposed and the capital available to the bank to cover unexpected losses arising from those risks.

Scope and timescaleBasel II is applicable to BinckBank and all its subsidiaries and foreign branches. The guidelines came into effect on 1 January 2007 and were implemented by BinckBank as from 1 January 2008. What are the implications of Basel II for BinckBank’s stakeholders?Basel II has no direct implications for BinckBank’s primary services. Basel II has a beneficial effect on our capital ratios and periodic reporting means that stakeholders are given a better insight into BinckBank’s risk exposure and capital position.

Risk management under Basel II and Pillar III disclosure

Basel II consolidation Basel II IFRSconsolidation consolidation

BinckBank NV (incl foreign branches) yes yes Binck België NV yes yes Binck Bewaarbedrijf BV yes yes Syntel Beheer BV yes yes Fintegration BV yes yes Syntel BV yes yes

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What are the financial and strategic implications for BinckBank?While Basel II has made it more difficult for some banks to meet the requirements, it has benefited BinckBank’s solvency ratio (BIS ratio). More capital has to be held to cover operational risk, but the capital requirement is lower for BinckBank’s lending to clients against securities (credit risk).

What are the implications for BinckBank’s operations?Basel II has given fresh momentum to the existing initiatives to improve the quality of the risk-management processes within BinckBank. Our capital management models have been further refined and we are working to develop a model to measure operational risk. BinckBank has also set up an infrastructure to provide better reporting to the regulators on the risks presented by specific scenarios and the related minimum capital requirements.

2. Overview of risk management

BinckBank operates on the basis of a healthy balance between risk, return and capital and adopts a deliberate and responsible approach to risk exposure. BinckBank seeks to maintain a moderate risk profile, to which our primary focus as a provider of online brokerage and savings products is conducive. To control its risk profile, BinckBank employs a risk-management framework based on predetermined risk criteria.

Strategic riskInternational economic conditions, together with the credit crunch, affect financial markets around the world and hence the results on BinckBank’s operations. Reduced trading volumes can translate into reduced commission income. BinckBank operates in a highly competitive environment in which its competitors, often very large financial institutions, have well established brands and ample financial resources. Retaining existing clients and attracting new ones is a high priority for BinckBank, and one in which it makes substantial investments. BinckBank’s financial position and results can be adversely affected by misjudged business decisions, poor execution of business decisions or inadequate response to changes in the business climate in general and the markets which are relevant to the

company in particular. Like other banking institutions, BinckBank depends on the trust of private clients. Because of its relative youth, the absolute size of its shareholders’ equity, its stock exchange listing and its large client base, BinckBank is particularly sensitive to ‘confidence issues’. The need to avoid such issues in all cases results inter alia in BinckBank adopting a risk-averse stance in the financial arena.

BinckBank’s risk profileBinckBank’s risk profile is fundamentally different from those of traditional Dutch banks. Its banking operations are relatively simple, consisting of secured lending against readily liquidatable securities portfolios, facilitating payments to regular contra accounts with other banking institutions and interest-based activities relating to client accounts. These activities are in general classified as relatively low-risk. Transaction settlement, on the other hand, is a complex process. BinckBank executes 15–20 million administrative transactions a year for over 250,000 account holders in more than 5,000 products on several trading platforms, via brokers and BinckBank’s stock exchange memberships. This, together with BinckBank’s heavy reliance on IT, translates into a relatively large operational risk.

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While our clients open accounts with BinckBank in order to invest, in practice we find that an average of 10–15% of assets under administration are held in cash, indicating that BinckBank’s liquidity position is very strong. BinckBank invests the cash in the market in a responsible and risk-averse manner in call loans and fixed-income securities or uses it to finance collateral lending.

Risk management organisationBinckBank’s Management Board paid close attention in 2008 to improving the risk management organisation and increasing risk transparency. With a view to facilitating the integration of Alex and BinckBank, staff departments and consultation structures were reorganised and a new structure was developed which clearly defines risk management responsibilities, reporting and escalation lines in the new organisation. The Chairman of the Management Board and the Chief Financial Officer (CFO), to whom the various departments involved in controlling risk report, are ultimately responsible for risk management in the new organisation. Each of these departments has its own by-laws which define their duties and responsibilities in relation to risk management. These by-laws have been coordinated to avoid both duplications and gaps in the risk management mechanisms. The independence of the various functions/departments is safeguarded by segregating the reporting lines.

The risk management framework is as follows:

0%

10%

20%

30%

40%

50%

60%

70%

Credit risk Market risk Operational risk

BinckBank Traditional Dutch bank

% o

f tot

al P

ilaar

I risk

Risk profile BinckBank

Supervisory Board

Audit Committee

Management Board

BinckBank Business Units

RiskCommittee

Risk Management(escalation to AC)

Compliance(escalation to AC)

IT security(escalation to CEO)

Finance & Control

IAD(escalation

to AC)

Internal Control

Treasury Committee

Retail

Marketing & Sales

Operations

ICT

Treasury

1st line of defence 2nd line of defence

ProfessionalServices

3rd line of defence

Exte

rnal

Acc

ount

ant

Regu

lato

rs (D

NB /

AFM

)

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BinckBank operates according to the ‘three lines of defence’ principle. The business units are primarily responsible for managing risks. The management team, consisting of the heads of Retail, Professional Services, Operations, ICT and HR, is responsible for the first line of defence. The first-line departments are supported by second-line specialised departments, such as Risk Management, Finance & Control, Compliance, Internal Control and ICT Security. The Internal Audit Department (IAD), the Audit Committee and the Supervisory Board, together with the external regulators and external auditors, constitute the third line of defence in the control framework.

Risk management in practiceRisk assessmentThe Management Board, assisted by the Internal Audit Department (IAD), ensures that a systematic analysis is conducted annually to identify, analyse and assess all risks. The findings of the risk analysis are discussed at the meetings of the Management Board and the Audit Committee and the Management Board’s meetings with the Supervisory Board. If necessary, the policy and business plan are adjusted on the basis of the findings of the risk analysis.

The results of the risk analysis are the input for planning the audit by the Internal Audit Department. As well as the regular risk analysis for the Management Board, the Internal Audit Department is also responsible for performing internal investigations of the configuration and function of the internal control and risk management measures. On the basis of the risk analysis, an internal audit schedule is drawn up, which ensures that all the risk areas that have been identified in all business units are subjected to an internal audit every three years. The audit schedule is fixed by the Audit Committee. The audit schedule includes follow-up audits in which the Internal Audit Department checks that the necessary action has been taken to address the shortcomings or other issues identified by previous audits. Each year, the Internal Audit Department updates the risk analysis on the basis of new activities/procedures and findings. The Internal Audit Department reports its findings to the responsible manager, the Management Board and the Audit Committee.

As well as several specifically agreed activities which did not result in an assessment, a total of 21 internal audits were conducted in 2008 to assess the internal control measures and the organisational structure. The assessment arrived at by the majority of the audits was positive (adequate/good). Unresolved issues mainly concern improvements in IT with regard to payments and improvements in the authorisation structure. A number of shortcomings were also identified in several operating processes, which will be rectified in the near future. In many processes, the organisation has become more professionalised, with the recruitment of new staff and improvements in systems and procedures. At a more general level, keeping pace with the organisation’s rapid growth presents a challenge, especially since the integration of Binck and Alex, with all the attendant risks to operating processes and system support. At the request of the Audit Committee, the IAD monitored the progress of the integration exercise and reported to the Supervisory Board. With a few exceptions, the objectives formulated by the Management Board at the beginning of 2008 have been achieved and the internal control measures have been implemented throughout the organisation, i.e. within Binck and Alex. This does not apply, however, to the IT environment: IT integration is a project extending over several years, which is also being monitored by the IAD.

BinckBank made good progress in 2008 with the implementation of the internal risk control system in a GRC (Governance-Risk-Compliance) application. The processes, risks and control measures built into this application facilitate transparent recording of the effectiveness of the specified control measures.

Risk managementLegal structure and segregation of assetsBinckBank is a public limited company which is listed on NYSE Euronext Amsterdam. BinckBank has several Dutch subsidiaries and one active foreign subsidiary. BinckBank holds all the necessary licences. BinckBank also has branches in Belgium, France and Spain. The cash streams passing through those branches are managed centrally by the Treasury department, which ensures that each branch has sufficient liquidity to give clients in all the countries access to their cash at all times. BinckBank is regulated by De Nederlandsche Bank (DNB) and the Authority for the

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Financial Markets (AFM). Foreign subsidiary Binck België N.V. and the foreign branches are subject to supervision by the local securities regulators. Higher-risk activities such as securities trading (formerly carried on by Binck Securities B.V., now Accion N.V.) were disposed of with effect from 30 June 2008 via a management buy-out, which has substantially improved BinckBank’s risk profile.

BinckBank’s organisational structure guarantees functional segregation. There are also a number of consultative structures/departments which are closely involved in the management of certain types of risk. The most important of these are:

Risk management functionsRisk CommitteeBinckBank’s Risk Committee concerns itself primarily with the management of credit risk. It consists of the CEO and CFO, the Risk Manager and the Planning & Control Manager. Representatives of the business lines may also be invited to attend its meetings. The Risk Committee addresses such matters as collateralised lending policy and client acceptance. The Risk Manager has the option of referring issues upwards to the Audit Committee.

Operational Risk CommitteeOperational risk management has been delegated to a sub-committee, the Operational Risk Committee (ORC), which consists of representatives of line management and specialist staff functions. The ORC manages risks relating to human factors and

shortcomings in business processes, such as IT security risk, legal risk and compliance risk. Its principal tasks include decision-making on sound and controlled operation, coordination and promotion of operational risk control and design of the main business processes. The framework of standards and guidelines within which these decisions are made has been configured by specialist staff functions which support decision-making and policy implementation by line management.

Risk Management departmentThe Risk Management department is responsible for the day-to-day implementation of the policy formulated by the Risk Committee for the management of credit and market risk and reports direct to the Management Board (CFO) and the Risk Committee. The credit risk policy with regard to deficit management, margin requirements and advances has been formulated in accordance with statutory requirements. The Risk Management department uses risk models commonly employed by investment companies, such as value at risk, duration, haircut and stress tests.

Treasury CommitteeThe Treasury Committee is concerned primarily with the management of liquidity risk and interest-rate risk and determines the investment policy for interest-rate-dependent operations. This relates to matters such as strategic allocation of freely available funds to the investment portfolio and determination of the funds to be held in cash. With regard to funds to be held in cash, this includes investments in call loans, the risk measures (ratings)

BinckBank N.V.

39% 35% 100% 100% 100%

100%

100%

Accion N.V. Florint B.V. Binck België N.V.

BinckBank N.V. Belgium Branch

BinckBank N.V. France Branch

BinckBank N.V.Spain Branch

BewaarbedrijfBinckBank B.V.

Syntel Beheer B.V.

Syntel B.V.

Fintegration B.V.

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employed and the maximum exposure per counterparty and sector. The Treasury Committee is also responsible for managing currency risk. Management of the investment portfolio is outsourced to Florint B.V., with which BinckBank has signed an asset management agreement. Additions to and withdrawals from the investment portfolio are determined monthly by the Treasury Committee. The Treasury Committee consists of the CEO, the CFO, the Treasury Manager, the Risk Manager and the Planning & Control Manager.

Compliance departmentThe Compliance department is responsible for monitoring compliance with the applicable codes of conduct and the relevant securities legislation and regulations and is concerned primarily with management of integrity risk. Through its code of conduct, insider trading regulations and whistleblower’s charter, BinckBank demonstrates the importance it attaches to values such as integrity and dependability. The Management Board has given the Compliance department direct access to all information with regard to its entire area of responsibility and authority to make use of any available tools which it considers necessary to the performance of its tasks. The Management Board also provides the Compliance department with sufficient resources to perform its duties responsibly and expertly. The Compliance department reports to the Chairman of the Management Board and has the option of referring matters upwards to the Audit Committee. The findings of the Compliance department are discussed by the Audit Committee.

Internal Control DepartmentThe Internal Control Department exists to facilitate operational improvement, by supporting the business units in defining their administrative organisation and internal control structures and verifying the existence of risk control measures. The area of responsibility of the Internal Control Department covers all operational and IT processes of all BinckBank entities.

IT Security departmentThe IT Security department is responsible for formulating and implementing information security policy. The IT Security department has the option of referring issues upwards to the Chairman of the Management Board.

Information and communicationEach year, the Management Board formulates a business plan defining the strategy, the targets and the expected risks, which is first submitted to the Supervisory Board for approval. After approval, the responsible department heads are given a presentation of the strategy, the broad targets and the specific targets for their individual departments. These targets are a standard part of the job profiles of these department heads.Each month, BinckBank’s financial progress is discussed at the meeting of the Management Board on the basis of the management reports, covering such items as the income statement and balance sheet for the past month and the current year in relation to the budget.On the basis of these discussions, the policy is assessed and evaluated and, where necessary, adjusted.

Operational supervisionExternal regulatorsBinckBank is a public limited company which is listed on NYSE-Euronext Amsterdam. BinckBank is regulated by both De Nederlandsche Bank (DNB) and the Authority for the Financial Markets (AFM). Its foreign activities are subject to supervision by the local securities regulators.

Supervisory BoardBinckBank has a two-tier management structure, which means that the executive and supervisory functions are assigned to different corporate bodies; the Management Board and the Supervisory Board. BinckBank believes that this structure ensures an adequate system of checks and balances, whereby the Management Board is responsible for the day-to-day running of the company and its strategy, while the Supervisory Board oversees and advises the Management Board. Each year, the Supervisory Board discusses the strategy of and risks associated with the business and, on the basis of reports, assesses the implementation and operation of the internal risk management and control systems.

Audit CommitteeThe Audit Committee is responsible for overseeing the implementation and operation of the system of internal control and risk management and monitoring the implementation of the external auditors’ recommendations and the functioning of

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the Internal Audit Department. Supervision of the company’s financial reporting is the responsibility of the Supervisory Board.

Internal Audit Department (IAD)The IAD is an independent function which is separate from the line organisation and the internal control built into the different areas of the business processes. The Internal Audit Department exists to facilitate operational improvement by examining and assessing the management of critical processes. The area of responsibility of the Internal Audit Department covers all BinckBank activities and entities, which are audited at least once every three years. The audit schedule is based on a risk analysis. Internal Audit is part of the portfolio of the Chairman of the Management Board. The IAD reports to both the Chairman of the Management Board and the Audit Committee.

3. Capital structure

BinckBank holds capital to cover risk. The quantity and quality of the capital held in reserve by BinckBank is also determined on the basis of International Financial Reporting Standards (IFRS) and rules such as those laid down in the European CRD guidelines, which have been implemented in the Netherlands in the Financial Supervision Act (Wft).

Calculation of capital requirements under Pillar I and Pillar IIThe minimum level of capital required under Pillar I (expressed by the BIS ratio) for banks is 8%. Basel II allows for different approaches to the implementation of the Pillar I requirements in respect of credit risk, market risk and operational risk. BinckBank adopts the standardised approach to credit risk and market risk, using the risk weightings and credit risk mitigation techniques indicated by the regulator. In respect of operational risk, BinckBank adopts the ‘basis indicator approach’, holding capital amounting to 15% of revenues for the previous financial year (in light of the rapid growth) instead of the average for the past three years as normally required under Basel II. The second pillar of the new Basel II accord addresses the process by which banks assess the adequacy of their internal capital, the Internal Capital Adequacy Assessment Process (ICAAP), and the process is assessed by the regulator, the Supervisory Review and Evaluation

Process (SREP). The internal capital calculated by BinckBank follows from the ICAAP (ICAAP capital). The ICAAP capital is the product of the internal capital calculations by BinckBank for all risks that are relevant to the business. For the 2008 financial year, the ICAAP capital ratio for BinckBank was 12%. To determine the ICAAP capital, BinckBank uses the complementary method, which involves holding capital for the complementary risks identified by BinckBank, such as business risk, interest-rate risk, concentration risk and settlement risk, in addition to the minimum capital requirements prescribed under Pillar I. The SREP capital, which is reached through dialogue between the Nederlandsche Bank (DNB) and BinckBank, is the capital which the external regulator considers necessary. The external regulator may increase the ICAAP capital by applying a prudential uplift. BinckBank submitted its 2008 ICAAP report to DNB in January 2009, but DNB is not expected to conduct its Supervisory Review and Evaluation Process (SREP) until March 2009, so BinckBank cannot say at this stage whether the regulator will apply a prudential uplift.

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BinckBank’s capital structure as at 31 December 2008:

Calculation of equity capital and actual Tier 1 capitalBinckBank’s equity capital comprises the issued and paid-up share capital, the share premium account, the profits retained in prior years and the result for the current year. Repurchased shares (treasury stock) are deducted from equity capital. Core capital is calculated by deducting from the equity capital the goodwill, (part of) the intangible assets, the

unrealised results on investments carried as available for sale (AFS) and unpaid dividend. The total actual Tier 1 capital is calculated by deducting from the core capital the equity investments in banks and financial institutions amounting to more than 10% of their capital. The composition of the equity capital and core capital is shown below.

Solvency ratios under Pillar I & Pilar II 31 December 2008 31 December 2007(x € 1,000)

Total available capital Tier 1 77,295 54,282

Total required capital Pillar I + II 45,534 45,755

Pillar I required capital 36,034 34,255Credit risk 13,545 12,161Market risk 138 934 Operational risk 22,351 21,160

Pillar II required capital 9,500 11,500

Capital surplus/deficit (Pillar I) 41,261 20,027Capital surplus/deficit (Pillar II) 36,761 8,527

BIS Ratio (Pillar I) 17.2% 12.7%Solvency Ratio (ICAAP) 13.6% 9.5%

Creditrisk

Operational risk

Pillar Icapital

Interest riskConcentration risk

Maximumstress

scenario

ICAAP capital

Possibleprudential

capital charge

Tier I capital

Settlement risk

Minimum capital(8% BIS-ratio)

Internal capitalRequired under (Pillar II)

0

Required versus available capital

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Pillar I Pillar II Stress test SREP Actual capital

(x € 1,000)

10,000

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4. Capital management

The aim of capital management at BinckBank is to maintain a sound solvency position, seeking constantly to strike the right balance between the equity capital it holds and the risks to which it is exposed. Capital management is making an increasingly important contribution to the systematic analysis and improvement of the return on BinckBank’s operations. In configuring the capital structure, BinckBank takes account of the limits set by DNB, the Basel II regulations and its internal requirements with respect to capital adequacy.

Capital strategyBinckBank aims for a solvency ratio of between 12% and 20%. Its capital policy envisages the distribution of surplus capital to the shareholders in the form of dividend or share buy-back, if the solvency ratio approaches 20%.

Capital targetsBinckBank has set the following capital targets:• growing Tier 1 capital from € 77.3 million to

€ 100 million in three years (2009/2010/2011);• paying an attractive dividend (50% of adjusted

net profit) each year;

• buying back shares in order to return to the shareholders part of the capital released via amortisation of the intangible assets, provided the solvency ratio does not fall below 15%.

As at 31 December 2008, BinckBank had equity capital of € 477.6 million and Tier 1 capital of € 77.3 million. The large difference between the Tier 1 capital and the reported equity capital is mainly due to the fact that the net book value (purchase price) of Alex (€ 391.1 million) used in the solvency calculations is not included in Tier 1 capital. For accounting purposes, the purchase price of Alex was recognised at the time of the acquisition as goodwill (€ 142.9 million) and intangible assets (€ 248.5 million). The intangible assets will be amortised over 5–10 years. The annual amortisation charge will be € 28.2 million for the first five years and € 21.5 million thereafter. Goodwill is not amortised, but is subjected annually to an impairment test. On the basis of the BIS requirements, amortisation of the intangible assets raises the solvency ratio by more than 5 percentage points per year. In addition to the monthly amortisation of intangible assets, BinckBank’s solvency position is also affected by a number of (partly opposing) factors, such as the capital requirement in respect of:

Equity capital and actual Tier 1 capital(x € 1,000) 31 December 2008 31 December 2007

Issued and paid-up capital 7,709 7,709 Share premium reserve 392,395 392,395 Buy-back of own shares (5,628) (487)Other reserves 50,020 35,044 Unappropriated profit 33,145 32,155

Total Equity 477,641 466,816

Less: goodwill (152,929) (152,929)Less: other intangible assets (220,920) (249,302)Less: reserve for unrealised gains and losses (8,832) 1,866 Less: proposed dividend (16,190) (11,564)

Core capital 78,770 54,887

Less: equity investments in financial subsidiaries (1,475) (605)

Total available capital (A) - Tier 1 77,295 54,282

Total required capital (B) - Pillar I 36,034 34,255

BIS Ratio (A/B x 8%) 17.2% 12.7%

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• risk-weighted assets• risks identified by the Internal Capital Adequacy

Assessment Process• profit for the current financial year• dividend policy

At the time of the acquisition of Alex, BinckBank introduced a dividend structure based on the adjusted net profit, which is calculated in the following way. Net profit adjusted for IFRS amortisation and the additional tax benefit on the difference between the commercial and fiscal amortisation of intangable assets and goodwill acquired on the purchase of Alex. In principle, 50% of the adjusted net profit is distributed as dividend.

Funding the dividend programmeThe dividend programme is funded from the reported profit. Dividend is only paid if the company’s reserves and its liquidity and solvency positions are adequate.

Funding the share buy-back programmeThe share buy-back programme is also being funded from the capital released by the amortisation of the intangible assets, the allocation of which is monitored continuously by BinckBank. A monthly check is made on how much is left for the share buy-back programme. When planning the capital available for share buy-back, due account is taken of the possibility of the capital requirement increasing sharply in the short term, for example if BinckBank is obliged to hold more liquidity owing to stress in the financial markets. Because the scope available for share buy-back has to be determined in advance and the profit and the precise capital requirement for the current month are not known, it is important to hold sufficient surplus capital at all times. The scope for share buy-back is adjusted depending on developments on the financial markets and the extent to which movements in the risk-weighted assets can be foreseen. In parallel with its policy on dividends and share buy-back, BinckBank is aiming to grow the total Tier 1 capital to € 100 million in the long term, meaning not all the growth in the surplus capital will be allocated to the share buy-back programme.

Capital management frameworkThe capital management process comprises four stages which run continuously as part of the day-to-day operations.

The necessary amount of capital depends on BinckBank’s risk profile, which is obtained from a systematic analysis of all of the risks to which BinckBank is exposed combined with the company’s attitude to risk. Using this risk profile, the necessary amount of capital is subsequently calculated. To ascertain the adequacy of the calculated capital requirement, BinckBank performs periodical stress tests.

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The following stress tests are performed on a regular basis:

5. Relevant risks, models and control measures

The risks which are relevant to BinckBank are discussed briefly below. The identification, analysis and assessment of risks, the design and implementation of related control measures and stress testing form a continuous process within BinckBank.

Managing credit riskCredit risk is the risk of a counterparty and/or issuing institution involved in trading in or issuing a financial instrument defaulting on an obligation and thus harming BinckBank financially. Credit risk relates to items included in the balance sheet in banks,

financial assets (including securities-backed lending) and other assets. With these balance sheet items, the most important consideration is the creditworthiness of the counterparty (except securities-backed lending, because these items are fully covered by securities as collateral).

LendingBinckBank lends to central governments, lower-tier public authorities if guaranteed by central government, central banks and other banks and credit institutions with a credit rating equal to or better than AA– (Fitch or equivalent). These are short-term loans with terms ranging from one day to a maximum of one month. BinckBank is exposed to counterparty risk (the risk of default by a

Type of risk Responsibility Stress test frequency

Credit risk Risk Management MonthlyOperational risk Finance & Control QuarterlyBusiness risk Finance & Control QuarterlyInterest-rate risk Treasury QuarterlyLiquidity risk Treasury Monthly

• Identify all risks in the business model/all risks to which the bank is exposed

• Determine the bank’s appetite for risk

• Define the solvency and liquidity drivers

Define risk profile

(stage I)

Determinerequired capital

(stage II)

Perform stress tests

(stage III)

Test for capital adequacy

(stage IV)

• Develop methods for calculating the minimum capital required to cover all the risks identified by the bank

• BinckBank uses the complementary approach (Pillar I + additional risks)

• Perform regular stress tests on all material risks for extreme but plausible events

• Evaluate the findings of regular stress testing and compare with actual stress by back-testing

• Compare actual and required capital and take corrective action where needed

EXECUTIVE BOARD AND SENIOR MANAGEMENT AND SUPERVISION

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counterparty to whom credit has been extended). BinckBank extends credit to counterparties within a system of limits for each counterparty, which are set in advance by the Treasury Committee. Lending to counterparties by the Treasury department is governed by strict rules, in accordance with treasury policy, and internally set limits on both the amount and term of loans to approved counterparties. The resultant credit risk is monitored via regular credit reviews.

The purpose of BinckBank’s investment portfolio is to invest the surplus liquidity on the market in order to optimise the interest margin between the funding cost and the investment return, consistent with the company’s risk appetite and the constraints of risk management/policy. The risk appetite is reflected in the policy of investing only in safe and liquid instruments that can be offered as collateral to the European Central Bank, within the limits of the following liquidity allocation model:

Credit risk standard approach

Risk weights Credit risk mitigation

(in € 1,000) 0% 10% 20% 50% 75% 100%

Substi-tutions

(gua ran-tees)

Collat-eral

Risk weighted

assets

Capital require-

ments (8%)

Claims or contingent claims on central governments or central banks 702,039 - - - - - - - - -Claims or contingent claims on regional governments or local authorities 4,623 - - - - - - - - -Claims or contingent claims on institutions 860 643,007 291,035 5,066 - - 2,140 - 125,469 10,037Retail claims or contingent retail claims 273,225 - - - 229,689 - (2,140) (227,549) - -

Past due items - - - - - 557 - - 557 45

Other items - - - - - 43,290 - - 43,290 3,463

Total 980,747 643,007 291,035 5,066 229,689 43,847 - (227,549) 169,316 13,545

Money market

Lending1 - 12 month book 1 – 3 year book

Funds entrusted 10% - 20% 30% - 50% 30% - 50%

As at 31 December 2008, the maturity calendar for BinckBank’s lending was as follows:

Name Nominal position % Average duration (€ million) of total in years

Cash 213.7 13% 0Deposits 70.0 4% 00–12 month book 623.7 39% 0.491–3 year book 696.1 43% 1.63HTM book 12.6 1% 1.27

Total 1,616.1 100% 1.09

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Under certain conditions, BinckBank will accept bank guarantees on behalf of its clients. Bank guarantees are only accepted from credit institutions with an investment-grade rating according to Fitch standards.

Via the client agreement, BinckBank offers clients securities-backed credit facilities. Advances can be used to cover the margin requirement, purchase securities or furnish bank guarantees against the securities account. In all these cases, BinckBank is exposed to credit risk with respect to the client. Given the nature of the loans and the collateral provided, however, the credit risk is limited. In the case of lending against the collateral of financial

instruments, the amount of credit advanced depends partly on the liquidity and price of the security in question. Credit monitoring is performed by the Risk Management department, which carries out automated checks on the basis of real-time prices. The credit risk therefore resides in movements in value of the collateral received. The Risk Management department watches in particular for undesirable concentration within client portfolios. Concentration risk arises when there is an excessive concentration of loans to one client or group of related clients and/or an investment portfolio that is one-sided. The Risk Management department monitors such concentrations daily and takes action

Lending (nominal) versus time to maturity (in years)181614121086420

1 W 2 W 3 W 1 M 2 M 3 M 6 M 9 M 1 Y 2 Y 3 Y

HTM Book 1 - 3 Yr Book 0 - 12 Mth Book Deposits Cash

€ m

illio

n

0%

10%20%

30%

40%

50%60%

1 2 5Issue Limits

Diversification 1 - 3 Yr book% invested in # issues vs limits

0%

20%

40%

60%

80%

1 2 5 10Issue Limits

Diversification 0 - 12 Mth book% invested in # issues vs limits

0.3%

78.4%

21.3%

AA till A-3.7%

AA-4.2%

AA16.3%

AAA75.8%

Credit profile - Issue credit rating Geografic spread of portfolio

The NetherlandsOther

Germany

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where necessary to moderate them. BinckBank maintains a provision of € 2.4 million for this risk.

For all products, lending against collateral of securities complies with the guidelines drawn up by the Risk Committee in accordance with the limits set by Section 152 of the Decree on the Conduct of Business Supervision of Financial Undertakings (Besluit gedragstoezicht financiële ondernemingen). BinckBank applies an upper limit on advances of 70% on shares and 80% on bonds, which is conservative compared with the standard approach adopted by regulators (maximum of 89.4% at 5 days) to determining credit risk under Basel II. BinckBank has reserved the right vis-à-vis its clients to adjust the limit on advances at any time without prior notice. The permitted limits are translated into maximum spending limits, expressed as a cover ratio. The minimum cover ratio is 1 and the extent to which the client’s cover ratio exceeds 1 is a measure of the surplus relative to the minimum requirement. The

cover ratio can be raised by furnishing bank guarantees, lodging collateral in the form of securities or increasing liquidity.If the cover ratio falls below 1, the client enters the deficit procedure. If the cover ratio is zero, the client proceeds from the deficit procedure to the recovery procedure.

As at 31 December 2008, receivables from 5,286 clients amounting to € 1.0 million were covered by the recovery procedure and loans to clients amounting to € 15.8 million (and representing 1.1% of the total lending book) were covered by the deficit procedure.

Credit risk by spending limit 31 December 2008

50

100

150

200

250

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2Surplus / deficit ratio

Spen

ding

limit

in €

thou

sand

s

% weighting of total credit risk

60%

9%

6%5%

7%

12%

1%0.1% 0.1%

0%2%4%6%8%

10%12%14%16%

Under collection

0 - 0.5 0.5 - 1 1 - 1.25 1.25 - 1.5 1.5 - 1.75 1.75 - 2 2 - 3 >3

deficit surplus

Recovery total € 1,034,000

0

100,000

200,000

300,000

400,000

500,000

600,000

Amount (in €) 204,720 46,960 213,412 46,058 84,821 438,029 1,034,000Number of customers 5,256 8 14 2 2 4 5,286

0 - 5,000 5,000 - 10,000

10,000 - 25,000

25,000 - 50,000

50,000 - 100,000 >100,000 Total

% to

tal c

redi

t len

ding

€

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Permitted limits are defined for each client and enforced by the trading system. For primary limit monitoring, the system does not permit new transactions which exceed a given limit (all based on real-time prices). Risk Management monitors securities-backed lending on a daily basis via the deficit procedure. This procedure is a statutory requirement under Sections 85 and 86 of the Decree on the Conduct of Business Supervision of Financial Undertakings. If BinckBank identifies a shortfall in a client’s cover ratio, the client is in principle obliged to redeem the deficit within five trading days. If the client does not take steps to redeem the deficit, BinckBank will proceed to close positions to redeem the deficit on day 5 at the latest.

As market conditions change, the advance percentage may not provide adequate cover for possible price movements in the future. Risk Management monitors this on a daily basis and if necessary will adjust the advance percentage immediately in line with the advance policy.

Provisions for securities-backed lendingProvisions for non-recoverable debts in respect of securities-backed lending are determined on a case-to-case basis and there are no collective provisions. The amount of the provisions depends on the repayment terms agreed with the client. The total provision as at year-end 2008 was € 0.5 million and equated to 46% of the total outstanding debt. Where Risk Management is unable to recover the debt, the matter is placed in the hands of a collection agency.

Management of market riskThe only market risk to which BinckBank is exposed is currency risk. Currency risk is the risk presented by movements in the value of items denominated in foreign currencies due to movements in exchange rates. It is BinckBank’s policy not to take active foreign-exchange trading positions. Foreign-exchange positions arising out of operating activities must be hedged the same day they become known. Because of the current system configuration within BinckBank, foreign-exchange positions arising out of client transactions are not visible until one trading day later. The currency risk on these positions during this one trading day’s delay is regarded as an accepted risk. It is BinckBank’s policy not to hedge the translation risk on equity investments in financial

institutions. No stress tests are performed for currency risk. No material gains or losses on foreign-exchange positions were recognised in the 2008 financial year.

Management of operational riskMany unexpected events may occur in BinckBank’s operational processes which result in losses or prevent the achievement of targets. Processes, systems and people may fail to perform as intended, employees may commit fraud, incidents may occur and day-to-day processes may be disturbed by accidents or system faults (IT risk). The risks arising out of such events are classed as operational risks. Losses due to operational risks are unavoidable. BinckBank is insured with third parties against many forms of foreseeable loss and, as required by law, maintains a capital buffer against uninsured (unforeseen) losses due to operational risks.

Operational risk is generally the result of deficiencies in the daily processing and settlement of transactions with clients or other parties or in the procedures and actions designed to ensure prompt detection of defects, quantitative or qualitative deficiencies or limitations in human resources, deficient decision-making due to inadequate management information and incorrect non-compliance with internal control procedures.

The capital requirements are calculated using the basic indicator approach, which sets the capital requirement for operational risk at 15% of total revenues, as prescribed by the regulator. The calculation is normally performed on the average of the revenues for the past three reporting years. In the light of its rapid growth, however, BinckBank computes the capital requirement at 15% of the revenues for the previous reporting year. For 2008, the figure is 15% of € 149.0 million, or € 22.4 million.

The internal target is for annual losses on normal activities due to operational risks not to exceed 1% of revenues. ‘Losses due to operational risks’ here means:• financial results on out trades and compensation

paid to clients (except ex gratia payments);• other direct loss due to faults in ICT systems,

automated information processing and operating processes

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Losses due to operational risk in 2008 amounted to 0.86% of total revenues and thus remained within the internal limit.

Operational risk management is built into the structure of the organisation, which embodies a number of the internal control measures and principles that BinckBank uses to manage operational risk. The main elements are:• locate the responsibility for managing operational

risk as close as possible to the processes themselves, i.e. with the line management;

• record the operating processes, risk management processes and organisational structure and their interrelationship in writing;

• implement controls within each process chain to ensure accurate information, together with performance and risk indicators;

• embed procedures for reporting and escalation to management;

• learn from incidents and mistakes. Where possible, record the details of incidents that resulted (or almost resulted) in losses and compare the records against the findings of risk assessments;

• automated recording and execution of transactions and related audit trails, daily transaction and position reconciliation, including reporting to management;

• procedures for staff recruitment and mentoring and functional segregation and job descriptions for all employees and departments;

• clear reporting lines, recording of required management information and periodic internal consultation;

• maintain a capital buffer for losses arising from unforeseen (uninsured) events and check the adequacy of the buffer with regular stress testing;

• maintain an insurance portfolio including directors’ liability insurance, company liability insurance, inventory insurance, buildings insurance and consequential loss insurance policies.

IT risk is the current and future risk to BinckBank’s financial position and results posed by deficiencies in the technology employed. BinckBank is heavily dependent on IT in general and deficiencies in this area pose a significant threat to BinckBank’s financial position and results. The IT organisation is designed to manage that risk and incorporates a series of internal monitoring procedures covering IT policy,

security policy, incident management, change management and availability and performance management. BinckBank also has a fallback facility which it can use in emergencies. Each year, BinckBank commissions external agencies to audit and report on specific areas of its IT operations.

As an internet bank, BinckBank is by definition exposed to a significant inherent risk of external fraud by online criminals. BinckBank is fully aware of this risk and operates a highly active security policy which is constantly evaluated. An important element of this policy is the annual ‘legal hack’ exercise, in which BinckBank invites a third party to attempt to break into its systems.

Risks relating to outsourcing of business processes are current and future risks to the company’s financial position and results posed by third-party provision on a structural basis of services which are part of BinckBank’s business processes. BinckBank has outsourced the following processes: Belgian payroll processing, French payroll processing, French office administration, management of the BinckBank NV investment portfolio, external custody of securities and some order execution. Service level agreements have been entered into for all outsourced activities and are reviewed regularly.

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Management of settlement riskBinckBank is exposed to settlement risk on its institutional brokerage activities. This relates to a very small number of clients which occasionally have orders executed via BinckBank, mainly in connection with cross-border settlements. The maximum limit on the total amount to be settled is fixed contractually for each wholesale client, based on the client’s creditworthiness as assessed independently by Risk Management. Compliance with these limits is monitored by Risk Management, which warns the counterparty if it approaches the set limit.BinckBank’s Risk Committee has resolved to hold capital of € 1.0 million against this risk. No stress testing is performed on settlement risk.

Management of business riskVarious factors, including loss of clients or slower growth in the client base, lower trading volumes, lower average order values, pressure exerted on prices by competitors etc., may result in lower revenues or losses for BinckBank. The bank operates in a highly competitive environment in which its competitors, often very large financial institutions, have well established brands and ample financial resources. BinckBank also operates in a turbulent economic environment: the international economic (cyclical) conditions and the credit crunch influence financial markets worldwide and thus indirectly affect BinckBank’s financial position and results. Its financial position and results can also be adversely affected by misjudged business decisions, poor execution of business decisions or inadequate response to changes in the business climate in general. On the basis of a statistical financial forecasting model using actual data for the past two years and taking account of the possibility of an impairment loss on the Alex acquisition, BinckBank has decided not to hold extra capital against this risk. The Planning & Control department prepares financial forecasts and performs stress tests on various scenarios on a quarterly basis to assess capital adequacy.

Management of interest-rate riskInterest-rate risk is the risk of movements in interest rates which might adversely influence future profitability.

BinckBank has an investment portfolio consisting of fixed-income securities with a range of maturities. The composition of the investment portfolio is determined by the Treasury Committee. The value of the investment portfolio is subject to variation due to movements in interest rates and changes in the creditworthiness of the issuing institutions/guarantors of those bonds.

To measure interest-rate risks on its investment portfolios, BinckBank uses an in-house value-at-risk (VAR) model to calculate with some degree of reliability the maximum loss on the investment portfolio in a given period. The variables can be adjusted to reflect the various scenarios. The historical data for the past ten years are used as source data on which the variance of and correlation between cash flows from the different instruments in the investment portfolio are determined. A separate model is used for stress testing, which involves applying different stress scenarios to interest income and expense. The dataset for 2008 is used as the basis, because there was a large fluctuation in interest rates. Because of the extreme developments on the financial markets in the past period, these data are also used for stress testing the interest-rate risk.

Assuming a holding period of 10 trading days, the maximum loss on the portfolio, at a 99.0% confidence level, is € 6.1 million. A holding period of 10 trading days has been chosen to allow for the reduced liquidity of some instruments in the investment portfolio. BinckBank assumes it will be able to liquidate a large proportion of its investment portfolio within this period at fair market prices. BinckBank therefore holds capital of € 6.1 million against interest-rate risk.

Management of liquidity riskLiquidity risk is the risk of liquid assets and investments not being available in sufficient quantity to enable BinckBank to meet its liabilities in the short term. BinckBank gives high priority to the management of this risk, to ensure that it always holds enough liquid reserves and can always discharge its financial liabilities. The liquidity risk management process is designed to take account of the effects of BinckBank-specific stress factors, such as negative publicity, increased trading activity by

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clients (net purchases) and variation of competitors’ interest rates.

If clients withdrew their assets en masse or client assets were used collectively to invest, there is a risk of BinckBank being unable to meet its liabilities to creditors. BinckBank’s liquidity risk policy therefore focuses primarily on managing this aspect of liquidity risk.

Liquidity of assetsBinckBank’s assets under administration that are used to fund demand for securities-backed lending cannot be liquidated to make up liquidity shortages. Because the available liquid assets far exceed the demand for securities-backed lending, however, the surplus liquidity can be invested short-term in the money market or in BinckBank’s investment portfolio (0–3 years). Liquidity risk is monitored by computing the liquidity position on a daily basis, covering all these items.

Liquidity position as at year-end 2008If necessary, it is expected that the entire investment portfolio can be liquidated in 10 days (enforced sale could incur losses) – depending on market liquidity. It can thus be concluded that BinckBank is unlikely to encounter liquidity problems.

One measure of liquidity risk is the gap profile, determined by grouping net (assets minus liabilities) face values into ‘maturity buckets’. BinckBank’s gap profile on the basis of the contractual remaining term is shown in note 44 to the financial statements on page 146.

Liquidity risk policy and relevant control measuresBinckBank pursues a prudent liquidity-risk policy designed to manage a liquidity crisis caused by the unexpected withdrawal of client assets. The liquidity risk policy comprises liquidity management based on a going-concern situation, asset liquidity monitoring and procedures in the event of unforeseen events. Liquidity risk management addresses the composition of the investment portfolio and money market deposits in a going-concern environment. Day-to-day cash management to cover BinckBank’s operating cash requirement is performed by the Treasury department in accordance with the regulator’s guidelines in this area. An important indicator of liquidity risk is the surplus shown by the liquidity test performed by De Nederlandsche Bank (weekly and monthly), which is based on a going-concern situation, assuming normal maturity of existing money market deposits and investments and a given degree of stress on savings and client accounts. The procedures in the event of unforeseen events is defined in the liquidity contingency plan.

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Dec-07 March-08 Jun-08 Sep-08 Dec-08

Cash balances and short-term depositsClient deposits

Liquidity balance

in €

milli

on

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Integrity riskIntegrity risk is the risk of inadequate compliance with codes of conduct imposed by BinckBank standards, social standards and legislation and regulations. Integrity risk may result in direct damage (such as claims and penalties) or consequential damage (such as reputational harm or loss due to fraud). In many cases, these are losses which have been insured against up to a reasonable amount. To control this risk, BinckBank imposes clear internal standards and codes of conduct which are clearly communicated within the organisation. BinckBank has a Compliance Officer, for whom clear reporting lines have been defined and a clear escalation procedure has been implemented. Together with the Legal department, the Compliance Officer is responsible for notifying managers and the Management Board promptly and accurately, in order to ensure that BinckBank’s activities comply with the applicable legislation and regulations. BinckBank has procedures in place for whistleblowers and mandatory reporting of suspicious transactions and has a Security Officer and a Privacy Officer.

6. Stress testing

Stress testing is an integral part of risk management and, as such, is mandatory under the Basel Agreement. Within Pillar II stress testing is obligatory to assess the effect on capital of all types of risk to which the bank is exposed. If the outcome of an extreme but in any way probable stress scenario exceeds the actual capital, it means that BinckBank’s risk appetite is exceeded and appropriate action has to be taken, in the form of risk-mitigating measures such as policy changes or insurance or by lowering the risk profile of its existing activities.

BinckBank performs regular stress tests on:• credit risk:

global recession: reduced creditworthiness of all counterparties

falling stock markets: extreme loss of collateral value in the form of securities

concentration risk: extreme falls in price of stocks in which investment is disproportionate

• operational risk: system failure authorisation errors extreme external events (natural disasters,

terrorism etc.) operational failure

• business risk: sharply narrower margins and lower number of transactions, taking into account the effect of a possible impairment loss on Alex

• interest-rate risk: prescribed testing for a sudden change in interest rates of 200 basis points and a sudden change in interest rates based on historical data

Liquiditeits profiel

• Determine liquidity profile (assets & liabilities)Identify cash flow drivers in business model

Liquiditeits projecties

Beleid & Beheersings maatregelen

Stress test

• Prepare daily operating cash flow scheduleMaintain minimum cash position

•

• Formulate liquidity policySet up system of early-warning indicatorsImplement relevant control measures

•

•

• Compute stress scenariosIdentify potential liquidity shortages Maximum cash outflow analysis

•

•

Liquidity profile

•

••

Liquidityforecasts

Policy andmanagement Stress testing

Liquidity management processThe liquidity management process is divided into four stages, which run continuously.

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• liquidity risk: negative publicity for BinckBank, causing a run on the bank

BinckBank’s stress tests for credit risk can be performed at the same time, but the operational risk scenarios already include an accumulation of the same events which could be double-counted if summed for the maximum scenario. The same applies to interest-rate risk. The figure below shows no additional capital requirement for business risk. The stress test for

business risk indicates that BinckBank continues to generate a positive cash flow before impairment for the stress scenarios tested. The impairment test on the goodwill and intangible assets relating to the acquisition of Alex depresses the reported profit but does not reduce BinckBank’s own funds in accordance with De Nederlandsche Bank’s requirements.

The capital requirement for the maximum stress scenario is € 34.7 million, which is well within the actual capital of € 77.3 million.

CR Test:Combinedscenario

OR scenario:Systemfailure

OR scenario:Authorisation

failure

OR scenario:Externalevents

IRR scenario:200 bps

shift (DNB)

Maximumsingle

scenario

Maximumcombinedscenario

IRR scenario:Historical

shiftOR scenario:Operational

failure

5,000

10,000

15,000

20,000

25,000

30,000

35,000x € 1,000

Maximum Stress scenario

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The risks and control measures that are relevant to BinckBank are discussed in the section entitled ‘Risk management under Basel II and Pillar III disclosure’ on page 32 of this annual report. The system of control measures discussed there illustrates how BinckBank achieves control. In this statement, the Management Board describes the extent to which it considers itself to be in control.

StatementWe are aware of our responsibility for internal control and have introduced risk management and control systems within BinckBank to ensure that, having due regard for BinckBank’s risk profile, progress towards our strategic, operational and financial targets is monitored, our reporting is reliable and we comply with the applicable legislation and regulations.

We again closely monitored our company’s internal risk management and control systems in 2008, which gave us a good insight into the significant risks and risks that are specific to BinckBank. We receive several internal control reports at regular intervals, such as reports on lending in relation to the value of the collateral (credit risk), transaction and position reconciliation (operational risk), client complaints and comments (operational risk) and availability of IT systems (operational risk). We also receive numerous regular reports on the progress of our business, such as financial reports (including profit and loss accounts, balance sheets, solvency and liquidity positions and related analyses), reports on the development of our client base and compliance and internal control checks that have been conducted. We also receive annual statements by the management team and the heads of the principal staff departments on the functioning of the risk management and control systems within their areas of responsibility. The Internal Audit Department submits periodic reports presenting the findings of the internal audits it has performed on the basis of the audit plan adopted by the Audit Committee. One or more specific audits are also performed by external agencies each year on specific areas such as the IT environment. All these reports are discussed in the meetings of the Management Board and other internal bodies such as the Audit Committee and

with the Supervisory Board. The purpose of these meetings is to monitor the correct functioning of the internal controls during the financial year, so that action can be taken where necessary.

However well our internal risk management and control system is designed, it can never give absolute assurance that we shall always be able to meet our objectives in terms of strategy, operations, reporting and compliance with all applicable legislation and regulations. The reality is that human error is always an element in decision-making and the cost always has to be balanced against the benefits when accepting risks and implementing controls. Even minor mistakes due to human error may have significant effects, employees may conspire to circumvent internal controls and responsible managers may ignore internal agreements.

Given these limitations, which are inherent in all internal risk management and control systems, and given the areas for improvement which have been identified, our assessment is that the internal risk management and control systems provide a reasonable degree of assurance that:

• we are able to track our progress towards BinckBank’s strategic and operational goals;

• BinckBank complies with the applicable legislation and regulations;

and, with regard to financial reporting risks:• the financial statements contain no material

misstatements;• the risk management and control systems have

functioned properly in the past financial year.

Without in any way detracting from our opinion and statement, we wish to mention the following current projects relating to the integration of Alex and Binck and our striving for operational excellence:• integrating the Alex and Binck IT platforms and

related front-office and back-office processes;• extending the demonstrable scope of the control

measures adopted within our fast-growing foreign operations;

• further improving checks and control measures in the Finance & Control and Operations

In control statement

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departments, mainly through better coordination of these checks and control measures;

• quality assurance in relation to the various models, parameters and tables used within BinckBank.

The Management Board

Thierry SchaapPieter AartsenNick BortotEvert Kooistra

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Introduction2008 was the year of integration of BinckBank and Alex Beleggersbank. The doubling in the size of the business had a significant impact on how we organise our HR policy and personnel administration and how we support the management and staff.

Heavy demands were made on BinckBank’s staff in 2008 in connection with the integration project and the changes to working practices which they were asked to accommodate, all without disturbing the organisation’s onward progress. These changes meant not only learning new things and taking on greater or different responsibilities, but also having more scope for individual initiative. For some staff, the changes brought uncertainty and even disappointment, emotions that inevitably accompany an acquisition. Now, over a year later, we can report that former competitors Alex and Binck are working together towards a shared future.

2008 was an eventful year for human resources. As well as intensive consultation with the Staff Council, a new administration system was introduced, new staff joined the company and, together with

numerous other changes, new working practices were introduced.

These developments are briefly outlined below.

Integration

Terms of employmentAfter the acquisition, one of the most important issues for former Alex Beleggersbank staff was harmonisation of the terms of employment. With a view to arriving at one single package of employment terms for all staff within BinckBank, agreement was reached with the Staff Council in 2008 on the procedure for revising the employment terms and the form of the related compensation scheme for former Alex Beleggersbank staff. These employees are covered by the Rabobank collective labour agreement until 1 May 2009, when the revised employment terms and the compensation scheme come into effect.

Under the Rabobank collective labour agreement, former Alex Beleggersbank staff have been eligible for group insurance. BinckBank has now arranged

Personnel and organisation

Employees by country as at 31-12-2008 by head count

France4%Netherlands

89%

Belgium7%

France3%Netherlands

92%

Belgium5%

There are two employees at our Spanish office.

Employees by country as at 31-12-2008 in FTEs(total: 475)(total: 559)

Fixed65%

Temporary35% Ag

e

Number of employees by type of contract as at 31-12-2008 Average age by department as at 31-12-2008

2729

3634

38

15

20

25

30

35

40

Retail Professionalservices

ICT Operations Staff

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group insurance at attractive staff discounts. All staff are covered by the same Health & Safety Agency. All BinckBank employees in the Netherlands are members of the same pension scheme and are covered by WGA (partial disability) insurance on the basis of new agreements on expenses and contributions.

A new personnel administration and payroll system which runs the entire administration of BinckBank staff in the Netherlands was installed in 2008 and commissioned on 1 January 2009. Staff in the other countries and the Syntel employees will be covered by this administration and payroll system in mid-2009.

CultureAlthough the products carried under the Alex and Binck labels show many similarities, it became apparent at the time of the acquisition that the two corporate cultures were very different. In the integration process, we sought to preserve and combine the best attributes of both organisations. Culture scans were conducted in early 2008 at both BinckBank and Alex Beleggersbank and the desired culture of the new organisation was defined. This information was used in the design and structure of the new organisation.

2009Another company-wide culture scan will be conducted in January 2009 to check whether the objective of preserving the ‘best of both worlds’ has been achieved. It will also incorporate a short questionnaire to measure employee satisfaction.

This information will be used in the further development of the HR instrumentation and to guide any further action that may be needed to reinforce the new culture.

CommunicationCommunication with the staff is crucial in any integration process. In addition to the existing media, including a staff newsletter, a Staff Council newsletter, a news page on the intranet, annual strategy sessions and quarterly financial briefings, the staff were also kept well informed of the appointments made at the start of the year. Information meetings were organised for the former Alex Beleggersbank staff to tell them about the pension scheme and compensation schemes. BinckBank also holds staff meetings – which are informal, in the BinckBank spirit – in the form of Friday afternoon drinks in the bar on Vijzelstraat and parties to mark special occasions, such as the integration party in March and the New Year party in December. To place internal communication on a more professional footing, an internal communications officer was appointed in 2008.

Male Female

Num

ber

Gender distribution by division/department

129

48 47

181

40

17

3511

27

24

0

50

100

150

200

250

ICT Operations Professionalservices

Retail Staff

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HR Development

Recruitment and selectionSeveral members of staff chose to leave BinckBank after the acquisition. A large number of the students working in the Sales department graduated and decided to pursue their careers elsewhere. There were some staff who were ready to take the next career step and others who no longer felt at home in the new organisation after the acquisition of Alex Beleggersbank. Changes were made to enable us to recruit the best people to fill these vacancies. The recruitment and selection process was redesigned on the basis of the answers to the following questions: 1) what kind of people are we looking for and where can we find them? 2) how good is the application procedure and can we make it better and faster? 3) what will it cost and how do we keep the cost down? 4) which agencies do we work with and what are their fees? Measuring the effectiveness of recruitment campaigns has also helped us make our campaigns more effective. Recruitment via the BinckBank website, which was visited by 2 million unique visitors in 2008, has also been found to be highly effective. A brand-new ‘working at Binck’ website was launched at the end of 2008 to make the most of this medium.

2009Recruitment is expected to be at a lower level in 2009 because the number of staff leaving has fallen sharply. The current staff have now found their place in the new organisation and the credit crunch has restored calm to the labour market, in contrast to the shortages in 2008. The ‘working at Binck’ website will be developed further in 2009 and the master contracts that have been signed will be evaluated. Managers and team leaders will be trained in selection techniques in 2009, to raise the quality of new recruits even higher.

Induction courseSince mid-2008, we have been running induction courses every two months, at which members of the Management Board, employees, team leaders and managers tell new staff about BinckBank’s organisation, its objectives and day-to-day operations. On the subject of compliance, staff are informed about what is and is not permitted and the underlying reasons for those rules. These afternoon sessions are rated highly by new staff. The induction

courses are constantly evaluated and the content is constantly being improved.

Planning cycleWith a view to optimising the development of the organisation and the staff and achieving agreed targets, it was decided in 2008 to change to a new planning cycle, so that the BinckBank targets could be translated throughout the organisation into departmental and individual objectives. New rules have also been introduced for annual salary increases and bonuses, which relate remuneration more closely to the company’s results and the individual’s performance.

To ensure that the new planning cycle was introduced efficiently, all managers were given training in the methodology of and conducting staff interviews. HR managers also provide post-training help and support for managers at the individual level with setting targets, conducting performance assessment interviews and making final appraisals. The training course, which is repeated each year for new managers and those needing a refresher, has received a good response from management and staff. The system clarifies what is expected of employees, the progress they are making and how they are assessed.

2009The employee’s personal development and the realisation of his or her ambitions will be the priority in 2009. Vacancies will as far as possible be filled internally in the future, to maximise the prospects for individual advancement. We also plan to establish a talent pool of individuals with middle or higher management potential to support BinckBank’s continuing growth and we are formulating a development programme for managers and team leaders.

All job descriptions were rewritten when designing the new organisation in 2008 and will be updated in 2009 to reflect any organisational changes made in the past year. A new job classification system will also be implemented and a new pay structure will be introduced.

TraineesWith a view to securing an ample supply of in-house management talent and supporting BinckBank’s

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current and future initiatives, a pilot project was initiated in 2008 involving two trainees who were already working for BinckBank part-time. Over a two-year period, these two employees will spend time in various departments, with the aim of developing skills and competences that have been identified in advance. The desired result and the personal progress to be achieved in the department concerned are defined at each stage and a training and mentoring programme is defined for each period.

2009The pilot project will be evaluated in the first quarter of 2009 and a decision will be made at that time whether to start two more trainees on this programme.

Foreign staffExcept for mandatory provisions of local legislation and regulations, the Dutch personnel policy is applicable to staff in other countries.

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As a young modern company, BinckBank takes the view that its position obliges it to play a proactive role in corporate social responsibility. Given the nature of its activities, BinckBank’s environmental impact is modest.

To make a start on discharging its corporate social responsibility BinckBank plans to embark on three initiatives in 2009.1. In the context of system integration with Alex

Beleggersbank, two new data centres will be established. They will use virtualisation technology, which enables several applications to be installed on one server, thus optimising server capacity utilisation. This is expected to yield substantial energy savings averaging around 40% per year compared with the current system. The saving could increase to about 50% in the future as more applications become available that support virtualisation.

2. An online instrument will be developed in 2009 that offers BinckBank clients a choice of sustainable investment products. On the basis of the client’s answers to a small number of questions, the system will present the client with a shortlist of products that best suit his or her personal sustainability profile, from which the client can choose. This functionality will be provided on the normal investor website.

3. BinckBank’s staff are at present spread over two locations and the company is searching for a single site that it can move to in 2010. The site must be easily accessible by public transport and cycle.

Corporate social responsibility

Re p o r t o f t h e Wo r k s Co u n c i l

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The BinckBank Staff Council hereby reports on its activities in 2008.

In late 2007, when it was clear that BinckBank would acquire the activities of Alex Beleggersbank as from 1 January 2008, the then Works Council of BinckBank (Alex Beleggersbank did not have its own staff council) decided to increase its membership by the temporary addition of a delegation from Alex Beleggersbank so that, well in advance of the statutory date for new elections, it would be appropriately constituted to deal with a wide range of issues. A large number of staff left – as was expected – in the first few months and a major relocation exercise between the two sites had to be completed before the integration process could really start. A big staff party was organised to mark the occasion, which was greatly enjoyed by all present.

In the elections held in April, in which votes were cast electronically for eight existing and new Works Council seats, there was a high 70% turnout. The new but comparatively inexperienced Works Council took office in May, starting with an on-site course for all nine members, from a range of groups and disciplines.

The focus in the second half of the year was on harmonising the terms of employment as between BinckBank and Alex Beleggersbank. The process was divided into two phases. In the first phase, the objective was to arrive at an appropriate scheme to compensate the former Alex Beleggersbank staff for their accrued Rabobank rights. The second phase focused on revising and, where possible, improving the Binck employment terms. After several months’ negotiation, agreement was reached in early December and the Works Council gave its consent to a comprehensive compensation package. A start will be made early in 2009 on two of the most important elements in the second integration phase: updating the job profiles and designing a new pay structure.

Other items on the agenda in 2008 included new private investment rules, an incentive scheme for key executives and various matters relating to health and safety.

The Works Council worked with the Management Board and the Human Resources department in an excellent spirit of cooperation last year. The consultation meetings were held in a friendly and open atmosphere and covered a wide range of issues. The mix of BinckBank staff and former Alex Beleggersbank staff means that the Works Council is representative of its constituency and is able to balance the interests of the company and the staff. We expect this spirit of cooperation to be sustained in 2009 and intend to use the experience gained in 2008 to become even more professional.

Rogier van ArkelChairman of the BinckBank N.V. Works Council

Report of the Works Council

CVs

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Thierry C.V. Schaap, Chairman(1971 – Dutch nationality)

Mr. Schaap is a co-founder of BinckBank N.V. and has been Chairman of the Management Board since its formation. He is responsible for Operations, ICT, IAD, Legal, Compliance and Investor Relations.

BinckBank shares held as at year-end 2008: 1,022,995

Pieter Aartsen, member of the Management Board(1964 – Dutch nationality)

Mr. Aartsen has been a member of BinckBank’s Management Board since 2006 and is responsible for Professional Services. From 1990 to 2004, Pieter Aartsen was with KAS BANK, where he held various posts in the Institutional Banking division until his appointment as Head of Sales and Relationship Management for the Benelux in 1996. He was appointed Head of Sales and Relationship Management for the UK in 2001. In 2004, he joined Deutsche Bank AG in London as Head of European Securities Clearing and Vice-President with responsibility for product development and sales.

BinckBank shares held as at year-end 2008: 22,214

CVs of Management Board members

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Evert J.M. Kooistra, member of the Management Board(1968 – Dutch nationality)

Mr. Kooistra has been a member of the Management Board of BinckBank N.V. since 2008 and is responsible for finance and control, risk management and human resources. He studied business economics at Erasmus University in Rotterdam and qualified as an accountant with the Netherlands Institute of Registered Accountants (NIVRA). Mr. Kooistra has over 15 years’ experience working in the financial discipline for companies including PriceWaterhouseCoopers and Shell, most recently as Finance Director at the US-based International Game Technology.

Evert Kooistra was appointed member of the Management Board for a term of four years by the BinckBank shareholders at the Annual General Meeting on 6 May 2008.

BinckBank shares held as at year-end 2008: 5,768

Nick Bortot, member of the Management Board(1973 – Dutch nationality)

Mr. Bortot has been a member of the Management Board of BinckBank N.V. since 2008 and is responsible for the Retail business unit. Mr. Bortot has been involved with BinckBank since its formation in 2000, as Private Clients Director, Marketing & Sales Director and General Manager of the successful BinckBank België.

Nick Bortot was appointed member of the Management Board for a term of four years by the BinckBank shareholders at the Annual General Meeting on 6 May 2008.

BinckBank shares held as at year-end 2008: 39,280

Page 64, f.l.t.r.;Pieter Aartsen

Thierry SchaapEvert Kooistra

Nick Bortot

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Kees J.M. Scholtes, Chairman(1945 – Dutch nationality)

Mr. Scholtes has been a member of the Supervisory Board of BinckBank N.V. since 2004. He was reappointed for a term of four years at the General Meeting of Shareholders on 19 April 2007. The Supervisory Board has appointed Mr. Scholtes as its Chairman.

Mr. Scholtes is currently also Chairman of the Supervisory Board of IBUS Company N.V., a member of the Executive Board of finance house Colonade B.V. and a member of the Investment Committee of Kunst- en Cultuur Pensioen- en Levensverzekerings-maatschappij. Mr. Scholtes is a member of the committee of enquiry set up by the Enterprise Section of the Amsterdam Court of Appeal investigating the policy of and events at Fortis. Mr. Scholtes is a former member of the Executive Boards of Postbank N.V., NMB Postbank N.V. and ING Bank N.V., a former member of the Executive Committee of ING Asset Management B.V. and a former member of the Supervisory Boards of several Postbank N.V., NMB Postbank N.V. and ING Bank N.V. investment funds. Mr. Scholtes has been a member of the Supervisory Boards of Parcom N.V., Barings Private Equity Holding, Euroclear Nederland (legal successor to Niec and Necigef) and RBC Dexia Securities Services N.V. (formerly NIEC CDC Labouchere Securities Services) and a member of the Executive Committees of the Amsterdam Stock Exchange and European Options Exchange (now NYSE Euronext). Mr. Scholtes also acted as project manager in the formation of the Dutch Securities Institute and the Financial Services Foundation.

BinckBank shares held as at year-end 2008: 0

Page 65, f.l.t.r.;Hans BrouwerFons van WesterlooKees ScholtesLeo Deuzeman

Hans J.K. Brouwer(1944 – Dutch nationality)

Mr. Brouwer has been a member of the Supervisory Board of BinckBank N.V. since 2004. He was reappointed for a term of two years at the General Meeting of Shareholders on 19 April 2007.

Mr. Brouwer is Chairman of the Supervisory Board of Koninklijke Jumbo B.V. and a member of the Supervisory Board of Nobel B.V. and Van Meijel Automatisering B.V. He is also a member of the Supervisory Board of the Vita Valley Foundation and a member of the Executive Committee of Stichting Vereniging voor de Effectenhandel (Amsterdam Stock Exchange Association) and Chairman of Stichting Amindho and Stichting Jazzorchestra van het Concertgebouw. Mr. Brouwer is a former General Manager of the Amsterdam Stock Exchange and a former Chairman of the Supervisory Board of NLKKAS, which is part of Euronext Clearing & Depositary N.V.

BinckBank shares held as at year-end 2008: 0

CVs of Supervisory Board members

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Leo Deuzeman(1952 – Dutch nationality)

Mr. Deuzeman was appointed for a term of four years at an Extraordinary General Meeting of Shareholders on 19 November 2007.

Mr. Deuzeman, a business economist, worked as a registered accountant for Deloitte from 1979 until 1986, having spent the years from 1976 to 1979 as a scientific researcher in the Financing department of the Economics faculty of the University of Groningen. From 1990 to 1998 and from April 2003 until April 2007, he was CFO of Kempen & Co N.V., at which bank he had held the position of Finance and Administration Manager from 1986 to 1990. From 1998 to 2003, Mr. Deuzeman was also managing partner of Greenfield Capital Partners N.V. He was a member of the Management Boards of Publifisque B.V., Managementmij Tolsteeg B.V., Kempen Management B.V., Asmey B.V., Arceba B.V., Kempen Finance B.V., Global Property Research B.V., Kempen Deelnemingen B.V., Greenpart B.V., Greenfield Management Services B.V. and Nethave Management N.V. He was also a member of the Supervisory Boards of Trustus Capital Management B.V., Engage B.V., Cegeka N.V. and Kempen Custody Services N.V.

Mr. Deuzeman is currently a member of the Supervisory Boards of Blue Sky Group and Intereffekt Investment Funds and Chairman of the Amstel Private Equity Club. He is also a member of the Management Boards of Kempen Property Hedge Fund Limited and Kempen Property Master Hedge Fund Limited.

BinckBank shares held as at year-end 2008: 0

Fons A.M. van Westerloo(1946 – Dutch nationality)

Mr. Van Westerloo has been a member of the Supervisory Board of BinckBank N.V. since 2004. He was reappointed for a term of three years at the General Meeting of Shareholders on 19 April 2007.

Mr. Van Westerloo is a member of the Supervisory Boards of InShared BV (a subsidiary of Eureko/Achmea), AT 5 BV and RTL Nederland B.V. He also a member of the Advisory Councils of DDB Amsterdam B.V., Entertainment Studies Hogeschool INHOLLAND, 3Stone Real Estate, ITV Media and Mansholt Communication and chairman of the National Home Shopping Awards Foundation. Mr. Van Westerloo is also a member of the Board of Management of the Royal Concertgebouw Orchestra and the Media and Government Advisory Committee.

Mr. Van Westerloo was formerly a member of the Operational Management Committee of RTL Group S.A., CEO of SBS Broadcasting B.V., General Manager of RTL 5 and Deputy General Manager of AVRO.

Number of shares Binck as at year-end 2008: 0

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Re p o r t o f t h e S u p e r v i s o r y B o a r d

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IntroductionBinckBank’s focus in 2008 was on the acquisition of Alex Beleggersbank and the resultant integration activities, the further professionalisation of the organisation, the preparations for setting up a platform for best-execution services, the launch of a share buy-back programme and the credit crunch. BinckBank continued to pursue its strategy, including the disposal of the last of its trading activities, thereby drawing to a successful conclusion the process initiated in 2004 to transform BinckBank from a trading-based business into an organisation focused more on securities brokerage and other activities. The Supervisory Board continued its close involvement in general aspects of BinckBank’s operations in 2008.

BinckBank turned in a good performance last year. In a period when many financial institutions found themselves in difficulty because of the credit crunch, BinckBank was able to post positive results. The integration of Alex Beleggersbank has yielded substantial cost savings and strengthens BinckBank’s position for the future. However, that does not mean that BinckBank was unaffected by the downward spiral of the financial markets in 2008 as a consequence of the credit crunch. Investor confidence was regularly tested by events, but active investors also saw opportunities in the volatile prices.

Composition of the Management Board and Supervisory BoardThe members of BinckBank’s Management Board and Supervisory Board are appointed by the General Meeting on the basis of a non-binding list of candidates drawn up by the priority shareholder.

At the 2008 Annual General Meeting, Mr. K.J. Bagijn (a co-founder of BinckBank) stood down from BinckBank’s Management Board and Messrs. E.J.M. Kooistra (CFO) and N. Bortot (Retail) were appointed to the Management Board. At the forthcoming Annual General Meeting, Mr. T.C.V. Schaap (Chairman), a co-founder of BinckBank, is to stand down after long service with the company. Mr. Schaap has led the company with dedication and expertise since its formation. The Supervisory Board has been greatly impressed by the way he, together

with co-founder Kalo Bagijn, has succeeded in elevating BinckBank to market leadership in online brokerage in the Netherlands and has embarked on a path of international expansion. The strategically important acquisitions of software supplier Syntel and Alex Beleggersbank were completed and successfully integrated under Mr. Schaap’s leadership. The Supervisory Board thanks Mr. Schaap for his valuable contribution to the company and wishes him every success in the future. Mr. K.N. Beentjes, currently Chief Operating Officer, will be proposed as Mr. Schaap’s successor. After the appointment of Mr. Beentjes, the Management Board of BinckBank will consist of Messrs. K.N. Beentjes, P. Aartsen, E.J.M. Kooistra and N. Bortot.

An intensive induction programme was provided for Mr. L. Deuzeman, who was appointed to the Supervisory Board at the extraordinary meeting in November 2007. Mr. J.K. Brouwer has offered himself for reappointment election to BinckBank’s Supervisory Board at the forthcoming General Meeting. If Mr. Brouwer is reappointed, the Supervisory Board will again consist of Messrs. C.J.M. Scholtes, J.K. Brouwer, A.M. van Westerloo and L. Deuzeman.

The information on the members of the Supervisory Board referred to in best-practice provision III.1.3 of the Dutch Corporate Governance Code can be found on page 66 and 67 of the annual report.

The Supervisory Board is composed such that the members are able to act independently, both of one another and of the Management Board or any other particular or partial interest, within the framework imposed by the Supervisory Board’s profile. The Supervisory Board considers that the independence criteria defined in best-practice provision III.2.1 of the Code have been met.

The members of the Supervisory Board attended almost all the meetings, a good habit on which the Supervisory Board places great value, taking the view that force majeure is the only acceptable reason for absence. Access to the members of the Management Board and Supervisory Board for consultation

Report of the Supervisory Board

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between meetings was good and is indicative of their commitment to the company.

The task of the Supervisory Board is to oversee the policy pursued by the Management Board and the business operations which it manages. The Supervisory Board’s duties also include advising the Management Board, acting in the best interests of the company and its stakeholders in the short and long term.

Supervisory Board meetings in 2008The Supervisory Board’s close involvement with the company’s business is evidenced by the fact that it held six regular meetings in 2008 and the Chairman and, where appropriate, individual members of the Supervisory Board held many informal meetings with the Chairman of the Management Board. The meetings were held in February, April, May, July, October and December 2008. The Supervisory Board’s schedule of meetings in 2009 will be essentially similar. The members of the Supervisory Board consider it important to keep informed of the company’s activities.

Items on the agenda of the Supervisory Board meetings in 2008 included the acquisition of Alex and the resultant integration activities, the further professionalisation of the organisation, the preparations for setting up a platform for best-execution services, the launch of a share buy-back programme and the credit crunch. The Supervisory Board also discussed the disposal of the last of BinckBank’s trading activities, the manner in which the strategy was to be pursued, the revision of the remuneration policy for the Management Board, the introduction of a similar policy for key staff within the organisation, the 2009 budget and the 2009 strategy document. The qualitative and quantitative targets for the Management Board in 2009 were adopted at the December 2008 meeting. Regularly recurring items included discussion of the auditors’ reports (in the presence of the external auditors), press releases and the annual report.

The agendas of the Supervisory Board meetings, which were prepared in all cases by the chairman of the Supervisory Board in consultation with the Management Board, covered all aspects of the company’s operations and included strategic, operational and organisational issues. The company’s

strategy and risk exposure were discussed on several occasions, as were the findings of the Management Board’s evaluation of the structure and operation of the internal risk management and control systems and any significant changes.

The joint meetings of the Supervisory Board and the Management Board were conducted in an open and collegial atmosphere, allowing ample scope for constructive criticism, which was helpful to the Supervisory Board in properly discharging its supervisory and advisory responsibilities. The Chairman’s conduct of the meetings was considered satisfactory by those attending them. At the joint meetings of the Management Board and Supervisory Board, there was frequent and detailed discussion of strategy.

The papers produced for the meetings of the Supervisory Board and its joint meetings with the Management Board were circulated in good time and were of a good standard. The papers provided the basis for well-informed discussion of all relevant developments and risks within the company and of the policy and strategy, which is essential to prudent decision-making.

In view of the growth in the scale and scope of BinckBank’s activities, the Supervisory Board paid particular attention to broadening and deepening the organisation and the available knowledge and expertise, thereby making an important contribution to management continuity at all levels in the organisation. In the absence of the Management Board, the Supervisory Board discussed the functioning of the Supervisory Board itself and of its individual members and the conclusions to be drawn. Taking the above considerations into account and exercising the necessary discretion, this examination addressed the profile, composition and competence of the Supervisory Board and that of its individual members, while taking due account of the need for prudence.

Likewise in the absence of the Management Board, the Supervisory Board discussed the functioning of the Management Board and of its individual members, again taking the above considerations into account. The Supervisory Board came to the unanimous conclusion that the Management Board

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as a whole and its individual members had again performed well in the past year.

The Management Board functioned last year as a close-knit professional team whose individual members performed their tasks to an extremely high standard and were able to focus particular attention on the specific areas allocated to them while discharging their broader shared responsibilities. The exchange of specific information on these areas between the individual members of the Management Board and between the Management Board and Supervisory Board was prompt and of good quality, enabling those concerned to perform their tasks satisfactorily. By exchanging expertise and experience intensively and proactively, the members of the Management Board were able, each from the perspective of their individual backgrounds, to put the collegial principle of management into practice.

Meetings of the Audit Committee in 2008The Supervisory Board has appointed an Audit Committee from among its members. The Audit Committee currently consists of Messrs. J.K. Brouwer (Chairman), C.J.M. Scholtes and L. Deuzeman. Its meetings are attended by the Chairman of the Management Board, the CFO, the manager of the Internal Audit Department (IAD) and the manager of the Compliance department. The Audit Committee meets the current requirements as to its independence and has sufficient members who possess the necessary financial expertise.The Audit Committee met on six occasions in 2008, in February (2x), April, June, September and December.

The Audit Committee is responsible for overseeing the implementation and operation of the system of internal control and risk management and monitoring the implementation of the external auditors’ recommendations and the functioning of the IAD. Supervision of the company’s financial reporting is the responsibility of the Supervisory Board. The Audit Committee met five times in 2006. All the meetings are attended by the Chairman of BinckBank’s Management Board.

The audits performed by the IAD and the Compliance department and their findings and recommendations were discussed at the meetings of the Audit

Committee, which concluded that the internal control measures and organisational safeguards in respect of the risks covered by the analysis were adequate. Specific comments and recommendations by the Audit Committee are discussed in the section entitled ‘Risk management under Basel II and Pillar III disclosure’ in the report of the Management Board on page 32 of this annual report.

The managers/directors of the IAD, Finance & Control, IT, Alex Asset Management, Risk Management and Operations departments gave several presentations on developments within their departments, to provide the Audit Committee with a good overview of the functioning of those departments and the progress achieved in the integration of BinckBank and Alex Beleggersbank.

Remuneration of the Management BoardBest-practice provision II.2.9 of the Dutch Corporate Governance Code requires a summary of the Supervisory Board’s report on remuneration policy to be included in the report of the Supervisory Board. This can be found on page 79 of this annual report.

The remuneration received by the members of the Management Board in 2008 was in accordance with the 2008 remuneration policy adopted by the General Meeting as referred to above. The long-term remuneration merits special attention in this context.

The amount outstanding as at the balance sheet date in respect of securities-backed lending to members of the Management Board was € 687,725 (2007: € 3,507,000) and is analysed as follows:

Thierry Schaap € 687,725

In the context of long-term remuneration, Article 23 of the 2008 remuneration policy states that the conditional award of phantom shares to the members of the Management Board in any calendar year will only become unconditional if, averaged over the entire three-year performance period, BinckBank achieves a position in the top five of the reference group in terms of TSR. The average position is calculated on the basis of the ranking in the TSR reference group as at 31 December of the relevant calendar year.

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The Supervisory Board decided on reflection that, considering its activities and stock market profile (market capitalisation, free float and traded volume), Bourse Direct should be replaced by DAB Bank in the TSR reference group with effect from 1 January 2008. The Supervisory Board duly exercised its discretionary authority to do so, pursuant to Article 23 of the 2008 remuneration policy, subject to approval by the 2009 Annual General Meeting of Shareholders.

The Supervisory Board considers it appropriate to ask the General Meeting of Shareholders for its approval because this change in the composition of the TSR reference group means that BinckBank was in fifth place as at 31 December 2008 (instead of sixth) and the phantom shares conditionally awarded to the members of the Management Board in 2008 become unconditional.

If the General Meeting of Shareholders does not approve the Supervisory Board’s decision to modify the composition of the TSR reference group, the provision formed in the 2008 financial statements will be released.

Consultation with the Works CouncilThe Works Council was enlarged shortly after the acquisition of Alex Beleggersbank to ensure proper representation of the employees of both companies. The new members of the Works Council were introduced to the Supervisory Board in 2008 and, on behalf of the Supervisory Board, Messrs. Scholtes and Van Westerloo attended a number of consultation meetings with the Works Council, the agenda of which included the proposed nomination of a candidate for appointment to the Management Board and the harmonisation of the terms of employment of former Alex Beleggersbank employees. The Supervisory Board attaches great value to its good relations with the Works Council and found its meetings with the Council to be both constructive and valuable.

Financial statements and dividendThe 2008 financial statements were discussed with the Management Board and Ernst & Young, the external auditor, and approved by the Supervisory Board at its meeting on 6 March 2009. Ernst & Young has issued an unqualified report on the financial statements, which will be presented to the General Meeting of Shareholders for approval on 28 April

2009. The proposed dividend for 2008 is € 0.41 per ordinary share in cash. An interim dividend of € 0.20 already having been distributed, the proposed final dividend is € 0.21 in cash per ordinary share, net of 15% dividend tax, and will be payable on 6 May 2009.

ConclusionDespite the challenges presented by the credit crunch and other developments, BinckBank managed to bring the past financial year to a successful conclusion. Under the excellent leadership of the Management Board and other senior executives and thanks to the skill, commitment and dedication of all the staff, BinckBank achieved the most important commercial targets and the integration of Alex Beleggersbank has so far been a success. We take this opportunity to thank the Management Board and all the staff once again for their effort and commitment.

The financial statements have been approved and signed by the members of the Supervisory Board in accordance with Section 101(2) of Book 2 of the Netherlands Civil Code.

Supervisory Board

Amsterdam, 6 March 2009

C.J.M. Scholtes (chairman)J.K. BrouwerA.M. van WesterlooL. Deuzeman

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Co r p o ra t e G o ve r n a n c e

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IntroductionCorporate governance was a frequent subject of debate again last year, on several occasions straining relations between the various stakeholders in listed companies. In many cases, the debate centred on the principles of good governance expounded in the Dutch Corporate Governance Code (the ‘Code’). The end of the evolving corporate governance story is not yet in sight.

The Code has assumed the status of law, in the sense that all listed companies are now required to include in their annual reports a statement of compliance with the Code’s principles and best-practice provisions as they apply to their management and supervisory boards. If they have not complied with those principles or best-practice provisions and/or do not intend to do so in the current or next financial year, they are required to state the reasons in their annual report (the ‘comply or explain’ principle).

The way in which Dutch listed companies implement an effective and transparent system of checks and balances is influenced by evolving social values and developments on the capital market. The Corporate Governance Code Monitoring Committee was set up in December 2004 to address this issue. In addition to monitoring compliance with the Code, its responsibilities include ensuring that the Code is kept up-to-date and operable and, where necessary, making suggestions and recommendations for improvement. The ultimate goal is to maintain a high standard of corporate governance.

The Corporate Governance Code Monitoring Committee has published several reports on compliance with the Code and made a number of recommendations, which resulted in a bill designed to help strengthen the Dutch corporate governance system. This bill changes the threshold for disclosure of controlling interests in listed companies (Financial Supervision Act or Wft), introduces compulsory disclosure of intentions when shareholdings reach 3% (Wft), enables companies to identify and communicate with shareholders (Securities Giro Transfer Act or Wge) and raises the threshold at which shareholders have a right to place items on the agenda (Civil Code).

On 10 December 2008, the Monitoring Committee drafted a final proposal for a revised Code. The most important changes relate to risk management, remuneration of Management Board members, responsibilities of shareholders, diversity in the composition of the Supervisory Board and corporate social responsibility. Since the revised Code takes effect as from the financial year commencing on or after 1 January 2009, the annual report for the 2009 financial year will include a report on compliance with the revised Code. To the extent that BinckBank does not already comply with the revised Code, it will either comply as soon as possible or explain in the annual report for the 2009 financial year why non-compliance is justified.

According to best-practice provision 1.1 of the Code, the broad outlines of the corporate governance structure of the company must be explained each year in a separate chapter of the annual report, partly by reference to the principles set forth in the Code. In this chapter, the company must also expressly state the extent to which it applies the best-practice provisions of the Code and, if it does not, why and to what extent it does not apply them. As mentioned above, the ‘comply or explain’ principle has been enshrined in law.

Best-practice provision 1.2 of the Code requires that each substantial change in the company’s corporate governance structure or its compliance with the Code be submitted to the General Meeting of Shareholders for discussion under a separate agenda item.

As a modern and innovative company, BinckBank endorses in large measure the principles expounded in the Code, which have received broad support. The proposed procedure for adoption of the Code by BinckBank was discussed at the Annual General Meeting of Shareholders on 21 April 2005 and was implemented in the course of 2005, inter alia via amendment of the Articles of Association. There has been no substantial change in BinckBank’s corporate governance structure or compliance with the Code since then. Best-practice provision 1.2 of the Code is therefore not applicable.

Corporate Governance

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A detailed description of BinckBank’s application of the Code is given in a separate annex. This has been posted on the company’s website (www.binck.com), to give BinckBank’s shareholders and other stakeholders access to information on how the company puts into practice the standards of good corporate governance embodied by the Code.

Legal structure

GeneralBinckBank is a public limited liability company which is listed on NYSE Euronext Amsterdam. BinckBank has several Dutch subsidiaries, associates and one foreign subsidiary. BinckBank also has offices in Belgium, France and Spain. BinckBank is subject to supervision by both De Nederlandsche Bank (DNB) and the Authority for the Financial Markets (AFM). The foreign subsidiary Binck België N.V. is subject to supervision by local securities regulators and holds its own licence.

Shares, issue of shares, voting rights and shareholder structureSharesBinckBank’s authorised capital consists of listed ordinary shares and 50 priority shares, each with a nominal value of € 0.10. The priority shares, which represent 0.00006% of the issued capital, are registered, are not listed on the stock exchange and are held by Stichting Prioriteit Binck (the ‘priority shareholder’). Special controlling rights are vested in the priority shareholder, as stipulated in the company’s Articles of Association which are posted on the company’s website. Further information on the position of the priority shareholder is given below. No depositary receipts have been issued for BinckBank shares.

Issue and cancellation of sharesThe issue of shares requires a resolution of the General Meeting of Shareholders, which may assign this authority to another corporate body for a maximum of five years. Save as provided otherwise by law, each shareholder will have a pre-emptive right to issues of ordinary shares in proportion to the total amount of his shares.

Shareholders have no pre-emptive right to shares which are issued a) to employees of the company or a group company or b) for payment other than in cash.

The pre-emptive right may be restricted or suspended by a resolution of the General Meeting. Pre-emptive rights can also be restricted or suspended by the corporate body referred to above, if it has been designated by resolution of the General Meeting, for a maximum of five years, as authorised to restrict or suspend pre-emptive rights.

If less than half of the issued capital is represented at the General Meeting, a resolution by the General Meeting to restrict or suspend pre-emptive rights, to designate another corporate body as authorised to do so or to withdraw such designation requires a majority of at least two-thirds of the votes cast. Such resolutions may only be adopted by the General Meeting on a proposal by the priority shareholder.

The General Meeting may resolve to reduce the issued capital by cancelling shares or reducing the nominal value of the shares by amendment to the Articles of Association.

Voting rightsEach BinckBank share confers the right to cast one vote. Resolutions are adopted on a simple majority of the votes cast, except where a larger majority is prescribed by law or the Articles of Association. For example, BinckBank’s Articles of Association state that a resolution to amend the Articles of Association, on a proposal of the priority shareholder, requires a majority of at least two-thirds of the votes cast.

Subject to the Supervisory Board’s approval, BinckBank’s Management Board may, pursuant to the Articles of Association, resolve to set a record date when convening meetings of shareholders. BinckBank sets record dates and thus complies with best-practice provision IV.1.7 of the Code.

Shareholder structureThe shareholders who have given notification of their holdings in BinckBank pursuant to Section 5.3 of the Financial Supervision Act (Wft) are listed on page 14 of this annual report. No shareholder agreements exist between BinckBank and the major shareholders.

As at year-end 2008, the members of the Management Board of BinckBank N.V. held the following shares:

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• T.C.V. Schaap : 1,022,995 shares• N. Bortot : 39,280 shares• P. Aartsen : 22,214 shares• E.J.M. Kooistra : 5,768 shares

Management Board

Two-tier management structureBinckBank has a two-tier management structure, which means that the executive and supervisory functions are assigned to different corporate bodies – the Management Board and the Supervisory Board. BinckBank believes that this structure ensures an adequate system of checks and balances, whereby the Management Board is responsible for the day-to-day running of the company and its short-term, medium-term and long-term strategy, while the Supervisory Board oversees and advises the Management Board.

Duties of the Management BoardWithin the limits set by the Articles of Association, the Management Board is responsible for managing the company.

Regulations governing the appointment and dismissal of members of the Management Board and amendment of the Articles of AssociationThe members of BinckBank’s Management Board are appointed or reappointed by the General Meeting on the basis of a non-binding list of candidates drawn up by the priority shareholder. Management Board members are appointed or reappointed for a term of four years ending not later than the first shareholders’ meeting held after the expiry of four years since the appointment or reappointment. Members of the Management Board may be suspended or dismissed at any time by the General Meeting. A resolution to suspend or dismiss a member of the Management Board must be supported by at least two-thirds of the votes validly cast which represent more than half of the issued capital. Members of the Management Board may also be suspended by the Supervisory Board. A suspension by the Supervisory Board may be lifted by the General Meeting. A suspension may be extended one or more times, but may not exceed three months in total. The General Meeting may only resolve to amend the Articles of Association on a proposal of the priority shareholder.

Supervisory Board

DutiesThe Supervisory Board is responsible for overseeing the policy pursued by the Management Board and the operations under its management. It is also the duty of the Supervisory Board to advise the Management Board, in the best interests of the company and its stakeholders, in both the short and long term, in addition to the responsibilities imposed on it by law and the Articles of Association.

Regulations governing the appointment and dismissal of members of the Supervisory BoardThe members of BinckBank’s Supervisory Board are appointed or reappointed by the General Meeting on the basis of a non-binding list of candidates drawn up by the priority shareholder. Supervisory Board members are appointed or reappointed for a term ending not later than the first shareholders’ meeting held after the expiry of four years since the appointment or reappointment. Members of the Supervisory Board may be suspended or dismissed at any time by the General Meeting. A resolution to suspend or dismiss a member of the Supervisory Board must be supported by at least two-thirds of the votes validly cast which represent more than half of the issued capital.

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Summary of the 2008 remuneration report

GeneralBest-practice provision II.2.9 of the Code requires the remuneration report to include information on how the remuneration policy has been implemented in practice in the past year and provide an overview of the remuneration policy envisaged by the Supervisory Board for the coming year and subsequent years. The remuneration report can be found on BinckBank’s website (www.binck.com). The 2008 remuneration policy which was adopted last year will provide the framework within which the Supervisory Board will determine the remuneration of the members of the Management Board for the years ahead.

The report of the Supervisory Board is required to include a summary of the remuneration report, which is presented here.

2008 remuneration policyRemuneration elementsAccording to the 2008 remuneration policy, the total remuneration package for members of the Management Board should consist of the following elements:

• basic salary;• short-term remuneration;• long-term remuneration;• pension scheme;• participation in the applicable BinckBank car

leasing scheme and reimbursement of mobile phone expenses.

Basic salary2008 remuneration policyThe basic salary should be competitive and should take account of the duties and responsibilities of the chairman and other members of the Management Board.

The basic salary should accordingly be in the following range:

Chairman € 375,000 – € 450,000 gross per annum

Members € 275,000 – € 325,000 gross per annum

Implementation of 2008 remuneration policyIn accordance with the 2008 remuneration policy, the gross basic salary is:

• T.C.V. Schaap (chairman) € 425,000• P. Aartsen € 300,000• E.J.M. Kooistra € 300,000• N. Bortot € 300,000

Short-term bonus2008 remuneration policyThe short-term bonus is allocated each year and paid in cash. The following performance criteria apply in respect of the short-term bonus:

a) 50% of the short-term cash bonus is based on a financial target set by the Supervisory Board at the beginning of the 2008 calendar year: earnings per share of € 0.98.

b) 50% of the short-term cash is based on qualitative targets which, as at 1 January 2008, included:

• successful organisational integration of Alex Beleggersbank;

• successful European expansion of both the Retail and Professional Services divisions of BinckBank;

• completion of defined internal projects to optimise management of business processes and raise efficiency;

• successful development of business process outsourcing (BPO) activities;

• successful implementation of new HRM policy (PBS system);

• integration of BinckBank and Alex Beleggersbank IT systems.

If the Supervisory Board considers that all the performance targets have been met in a calendar year, a short-term cash bonus is awarded to the Management Board members for that year of 45% of their gross basic annual salary. Exceptionally good performance may be rewarded with a maximum short-term cash bonus of 65% of gross annual salary.

No short-term cash bonus is awarded in respect of a calendar year if the Management Board members fail to meet at least 80% of the financial targets for that year. If the Management Board members achieve at least 80% of the financial targets in a calendar year but do not meet all the performance criteria, a

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short-term bonus of up to a maximum of 45% of gross basic annual salary may be awarded at the Supervisory Board’s discretion.

Implementation of 2008 remuneration policyThe quantitative target for 2008 of adjusted earnings per share of € 0.98 was not achieved, but the qualitative targets were met. The Management Board applied itself diligently to its tasks, including the integration of BinckBank and Alex Beleggersbank and the further professionalisation of the available expertise within the operational organisation, the IT organisation, the back office and various staff departments. By pursuing an appropriate credit policy, the Management Board was also able to lead the company very successfully past the abyss of the credit crunch. In accordance with the 2008 remuneration policy, the short-term cash bonus will therefore be:

• T.C.V. Schaap (chairman) € 95,625• P. Aartsen € 67,500• E.J.M. Kooistra € 45,000• N. Bortot € 45,000

Long-term remuneration2008 remuneration policyOn 1 January each year, a number of BinckBank shares (‘phantom shares’) are conditionally awarded to the members of the Management Board by way of a long-term performance bonus. The annual conditional award of phantom shares is equal to 45% of the Management Board member’s gross basic salary for that calendar year at the closing price of BinckBank ordinary shares on NYSE Euronext Amsterdam on 31 December before the year of allocation. The annual conditional award of phantom shares entitles the Management Board members, three years from the date of the award, to payment of the value of the underlying BinckBank ordinary shares as at 1 January of the calendar year after the last calendar year of the three-year period (the ‘value’) if the following condition precedent has been met.

The condition precedent is related to BinckBank’s total shareholder return (TSR) performance compared with that of the companies in the TSR reference group. On 1 January 2008, the TSR reference group comprised the following companies:

- Avanza (Sweden)- Boursorama (France)- Comdirect (Germany)- DAB Bank (Germany)- E*trade Financial (United States)- Nordnet Securities (Sweden)- Optionsxpress (United States)- Schwab (United States)- Swissquote (Switzerland)- TD Ameritrade (United States)

The conditional award of phantom shares in any calendar year will only become unconditional if, averaged over the entire three-year performance period, BinckBank achieves a position in the top five of the reference group in terms of TSR. In that case, the value will be paid in the month of February as follows:

• if BinckBank reaches the top position in the reference group, 150% of the conditionally awarded number of phantom shares will be made unconditional;

• if BinckBank achieves fifth position in the reference group, 100% of the conditionally awarded number of phantom shares will be made unconditional;

• if BinckBank is placed between first and fifth, the number of conditionally awarded phantom shares made unconditional will be calculated pro rata.

Implementation of 2008 remuneration policyTaking into account the business and stock market profiles of the members of the peer group, the Supervisory Board decided to exercise its discretionary authority to modify the composition of the peer group, replacing Bourse Direct with DAB Bank. In terms of TSR, BinckBank ended 2008 in fifth place.

Pension scheme2008 remuneration policyManagement Board members participate in a defined benefit pension scheme, into which the company pays an annual premium amounting to 20% of the annual basic salary.

Implementation of 2008 remuneration policyThe members of BinckBank’s Management Board participated in this scheme in 2008.

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Participation in the applicable BinckBank car leasing scheme and mobile phone cost reimbursement scheme2008 remuneration policyThe members of the Management Board are expected to participate in the applicable BinckBank car leasing scheme and mobile phone cost reimbursement scheme.

Implementation of 2008 remuneration policyThe members of BinckBank’s Management Board participated in these schemes in 2008.

Management Board remuneration and contract terms

Management remuneration in 2008

Fixed salary

Pension contri-bution

Social security

Paid short-term

bonus

Paid long-term

bonus

Settlement under 2007 remunera-tion policy Total

Provision for long-term

bonusBinckBank

shares held

T.C.V. Schaap € 425,000 € 85,000 € 6,852 € 95,625 - € 147,059 € 759,536 - 1,022,995

K.J. Bagijn* € 76,486 € 15,297 € 2,284 - - € 147,059 € 241,126 -

P. Aartsen € 300,000 € 60,000 € 6,852 € 67,500 - € 19,736 € 454,088 € 135,000 22,214

E.J.M. Kooistra** € 200,000 € 40,000 € 4,568 € 45,000 - - € 289,568 € 90,000 5,768

N. Bortot** € 200,000 € 40,000 € 4,568 € 45,000 - - € 289,568 € 90,000 39,280

Total € 1,201,486 € 240,297 € 25,124 € 253,125 - € 313,854 € 2,033,886 € 315,000 1,090,257

* Since standing down on 6 May 2008, has continued to work for the company in an advisory capacity at a fee of € 100,000

** Appointed to Management Board on 6 May 2008, fixed salary rounded up in whole months

Management remuneration in 2007

Fixed salary

Pension contri-bution

Social security

Variable pay Total

BinckBank shares held

T.C.V. Schaap € 215,000 € 43,000 € 6,000 € 281,000 € 545,000 1,022,995

K.J. Bagijn € 215,000 € 43,000 € 6,000 € 281,000 € 545,000 1,022,995

P. Aartsen € 215,000 € 43,000 € 6,000 € 228,000 € 492,000 6,755

Total € 645,000 € 129,000 € 18,000 € 790,000 € 1,582,000 2,052,745

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Remuneration of members of the Supervisory Board and Audit Committee for the 2008 financial yearThe General Meeting of Shareholders on 6 May 2008 resolved to grant the following remuneration with effect from 1 January 2008:

Supervisory BoardAnnual remuneration:- chairman of the

Supervisory Board € 40,000 gross- member of the

Supervisory Board € 26,000 gross

Audit CommitteeAnnual remuneration for committee service:- chairman of the

Audit Committee € 6,000 gross- member of the

Audit Committee € 4,000 gross

The remuneration of the members of the Supervisory Board and the Audit Committee and the remaining terms of the contracts with the individual members of the Supervisory Board are summarised in the tables below.

Overview remuneration of Management Board members

Contract terms of Management Board members

Date of (re)appointment Contract expiry date

Contract term in years

Remaining term in months as at

31/12/08

T.C.V. Schaap* 6 May 2008 6 May 2010 2 16

P. Aartsen 26 March 2006 26 March 2010 4 15

E. Kooistra 6 May 2008 6 May 2012 4 40

N. Bortot 6 May 2008 6 May 2012 4 40

* to stand down at the General Meeting on 28 April 2009

Overview remuneration of Supervisory Board members

Supervisory Board remuneration in 2008

Fixed salary as Super-

visory Board member

Fixed salary as Audit

Committee member Total

BinckBank shares held

C.J.M. Scholtes € 40,000 € 4,000 € 44,000 -

J.K. Brouwer € 26,000 € 6,000 € 32,000 -

A.M. van Westerloo € 26,000 - € 26,000 -

L. Deuzeman € 26,000 € 4,000 € 30,000 -

Total € 118,000 € 14,000 € 132,000 -

Supervisory Board remuneration in 2007 Fixed salary

Fixed salary as Audit

Committee member Total

BinckBank shares held

C.J.M. Scholtes € 32,000 - € 32,000 -

J.K. Brouwer € 29,000 - € 29,000 -

A.M. van Westerloo € 20,000 - € 20,000 -

L. Deuzeman € 4,000 - € 4,000 -

Total € 85,000 - € 85,000 -

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Compliance with the Dutch Corporate Governance Code (the ‘Code’)

BinckBank is required to provide information in the annual report on compliance with the principles and best-practice provisions of the Code relating to the Management Board or Supervisory Board of the company. If the company has not complied with the principles or best-practice provisions or does not intend to comply in the current and subsequent financial year, it must state the reasons in the annual report. This section explains which of the best-practice provisions of the Code BinckBank does not comply with and the reasons for and extent of its non-compliance.

RemunerationBest-practice provision II.2.10 of the Code specifies the information to be provided by the Supervisory Board in its overview of the remuneration policy planned for the next financial year and subsequent years.

BinckBank complies with this best-practice provision if and to the extent that it does not relate to information which relates to the company’s competitive position, such as financial and commercial targets. The Management Board and Supervisory Board do not consider it to be in the interests of the company or its stakeholders to disclose such information. The same reservation applies to publication of the main elements of contracts between Management Board members and the company immediately they are signed, as required by best-practice provision II.2.11 of the Code, if and to the extent that this relates to market-sensitive information.

Stock options/sharesBest-practice provision II.2.3 of the Code treats the allocation of shares for no financial consideration as a form of variable remuneration. According to the Code,

the purpose of a variable element should be to reinforce the Management Board members’ long-term commitment to the company and the furtherance of its interests. According to the Code, this can be achieved by requiring Management Board members who are allocated shares for no financial consideration to undertake to retain them for at least five years or until termination of their employment. Since these shares are allocated for no financial consideration, the best-practice provision requires that allocation be dependent on the achievement of clearly quantifiable and challenging targets, which have been defined in advance. The performance criteria must be stated in the remuneration report.

Strictly speaking, BinckBank does not award shares or stock options. Instead it awards variable remuneration in the form of phantom shares. The performance criteria are clearly quantifiable and challenging, being based on a comparison in terms of total shareholder return with comparable companies (peer group), and require BinckBank to achieve above-average performance over a three-year period. In our view, the requirement to hold the shares for at least five years or until termination of employment is inconsistent with the term of office of Management Board members (four years) and does not take account of the pace of economic change. We consider three years to be sufficient to safeguard adequately the medium-term interests of the company and its shareholders.

Regulations embodying rules on the ownership of and transactions in securities by Management Board members other than those issued by their ‘own’ companyOne of the recommendations of best-practice provision II.2.6 of the Code is that the Supervisory Board should adopt regulations embodying rules on the ownership of and transactions in securities by Management Board members other than those issued

Contract terms of Supervisory Board members

Contract terms of Supervisory Board members

Date of (re)appointment Contract expiry date

Contract term in years

Remaining term in months as at

31/12/08

C.J.M. Scholtes 19 April 2007 AGM in 2011 4 28

J.K. Brouwer 19 April 2007 AGM in 2009 2 4

A.M. Westerloo 19 April 2007 AGM in 2010 3 16

L. Deuzeman 19 November 2007 AGM in 2010 4 35

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by their ‘own’ company. These regulations should be posted on the company’s website.

BinckBank complies with this best-practice provision, but for practical reasons has integrated these regulations into the Management Board regulations. The regulations have therefore been adopted indirectly by the Supervisory Board and the requirements of best-practice provision II.2.6 of the Code have been met.

Suspension/dismissalAccording to best-practice provision IV.1.1 of the Code, it must be possible for a resolution to dismiss a member of the Management Board or Supervisory Board to be adopted by an absolute majority of the votes cast, but it may be made a condition that this majority represents a given proportion of the issued capital, which may not exceed one-third.

Pursuant to BinckBank’s Articles of Association, a resolution of the General Meeting to suspend or dismiss a member of the Management Board or Supervisory Board requires a majority of at least two-thirds of the votes cast, representing more than half of the issued capital.

Best-practice provision IV.1.1 of the Code will be implemented when the Articles of Association are next amended. In the interim, the members of BinckBank’s Management Board and Supervisory Board have adopted this best-practice provision and compliance is thus assured. The members of BinckBank’s Management Board and Supervisory Board have also, on a purely voluntary basis, consented to comply with the majority and quorum requirements of this best-practice provision in respect of any resolution of the General Meeting to suspend them.

Supervisory Board

CommitteesPrinciple III.5 of the Code recommends that all Supervisory Boards appoint an audit committee, a remuneration committee and a selection and appointments committee to perform certain tasks on behalf of and under the responsibility of the Supervisory Board. If the Supervisory Board is too small, the appointment of committees may be dispensed with, in which case the entire Supervisory Board is responsible for performing the tasks and functions of those committees as referred to in the best-practice provisions.

Best-practice provision III.5.4 refers to a number of areas on which the audit committee should focus in supervising the Management Board. BinckBank applies this best-practice provision, but some of these supervisory tasks have, for practical reasons, been assigned to the Supervisory Board as a whole and are thus included in the Supervisory Board regulations.

Regulations embodying rules on the ownership of and transactions in securities by Supervisory Board members other than those issued by their ‘own’ companyOne of the recommendations of best-practice provision III.7.3 of the Code is that the Supervisory Board should adopt regulations embodying rules on the ownership of and transactions in securities by Supervisory Board members other than those issued by their ‘own’ company. These regulations have been posted on the company’s website.

BinckBank complies with this best-practice provision, but for practical reasons has integrated these regulations into the Supervisory Board regulations.

MinutesAccording to best-practice provision IV.3.8 of the Code, the minutes of the General Meeting of Shareholders must be made available on request to shareholders within three months of the meeting, after which the shareholders must be given three months to comment on the minutes. The minutes must then be adopted in the manner prescribed by the Articles of Association.

This best-practice provision only applies to BinckBank if the Chairman of the Management Board and/or

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the Management Board does not decide to have a notarial record made of the meeting, in which case BinckBank will comply with the best-practice provision. If it is decided to have a notarial record made of the meeting, or at least of the resolutions adopted by the meeting, that record will have absolute evidential force. In the absence of evidence to the contrary, it will be accepted by all as an accurate representation of the proceedings of the meeting. It is permitted in that case not to include responses by shareholders in the record.

Anti-takeover defences

Stichting Prioriteit Binck (the ‘priority shareholder’) holds 50 priority shares in BinckBank N.V. Under the Articles of Association, the priority shareholder has a central role in many important decisions. Management Board and Supervisory Board members, for example, are appointed from a non-binding list of candidates drawn up by the priority shareholder. A resolution to amend the Articles of Association can only be adopted on a proposal of the priority shareholder, and the priority shareholder determines what part of the (remaining) profit is to be added to reserves.

In essence, the purpose of the priority shareholder is to counter any influence over BinckBank’s management or operations which might be prejudicial to the independence of the company and its related enterprise and to promote good governance of its affairs. The Executive Committee of the priority shareholder has three members. Member A is appointed by BinckBank’s Supervisory Board, member B by BinckBank’s Management Board and member C by members A and B together. The incumbent members A, B and C of the priority shareholder’s Executive Committee are Messrs. C.J.M. Scholtes (Chairman of BinckBank’s Supervisory Board), T.C.V Schaap (Chairman of BinckBank’s Management Board) and J.K. Brouwer (member of BinckBank’s Supervisory Board), respectively.

As stated in the 2007 annual report, BinckBank’s Management Board and Supervisory Board see no justification at present for rescinding or restricting the priority shareholder’s powers. The Management Board and Supervisory Board consider that maintaining the priority shareholder’s position helps to maintain the continuity of BinckBank N.V. and its

short-term and long-term policy by ensuring that due consideration is given to the interests of all stakeholders in the company.

Article 10 of the Takeover Directive Decree

a) An overview of the company’s capital structure, the different classes of share and the associated rights and obligations is given on page 39 of this annual report, together with the percentage of the issued capital which each class of share represents.

b) The company imposes no restrictions on the transfer of shares or depositary receipts issued with the cooperation of the company.

c) Shareholdings in the company of which disclosure is prescribed by Section 5.3 of the Financial Supervision Act (Wft) are stated on page 14 of this annual report.

d) Stichting Prioriteit Binck (the ‘priority shareholder’) holds 50 priority shares in BinckBank N.V. Under the Articles of Association, the priority shareholder has a central role in many important decisions. Management Board and Supervisory Board members, for example, are appointed from a non-binding list of candidates drawn up by the priority shareholder. A resolution to amend the Articles of Association can only be adopted on a proposal of the priority shareholder, and the priority shareholder determines what part of the (remaining) profit is to be added to reserves. Further information can be found in the company’s Articles of Association, which are posted on the website.

e) There is no share scheme for employees and hence no mechanism for monitoring such a scheme.

f) Each share shall entitle its holder to cast one vote. No vote may be cast at the General Meeting of Shareholders in respect of shares or depositary receipts held by the company or one of its subsidiaries, nor in respect of shares of which they hold depositary receipts. Holders of a usufruct or pledge on shares held by the company or its subsidiaries shall not be deprived of voting rights if the usufruct or pledge was established before the share came into the possession of the company or a subsidiary. Neither the company nor a subsidiary may exercise voting rights in respect of a share on which it holds a usufruct or pledge. For the purposes of determining the extent to

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which shareholders vote, are present or are represented or the extent to which the share capital has been paid up or is represented, no account shall be taken of shares in respect of which the law prescribes that no votes may be cast. The provisions of Articles 11 and 12, respectively, of the Articles of Association apply to voting rights attaching to shares on which a usufruct or pledge has been established. The issue of depositary receipts – with the cooperation of the company – is permitted by the Articles of Association. If depositary receipts have been issued with the cooperation of the company, the provisions of Article 28 of the Articles of Association will apply to voting rights and the appointment of proxies to exercise voting rights. Voting is not subject to a qualifying period. No time limit is specified for the exercise of voting rights. More information on the Articles of Association can be found on the company’s website.

g) The company is not aware of any agreements with shareholders which might give rise to any restrictions on the transfer of BinckBank shares or depositary receipts issued with the company’s cooperation or on the voting rights.

h) The procedure for appointment and dismissal of the members of the Supervisory Board and Management Board and the rules for amendment of the Articles of Association are defined in the company’s Articles of Association and are summarised on page 78 of the annual report. More information can be found in the company’s Articles of Association, which are posted on the website.

i) The powers of the Management Board in respect of the issue of the company’s shares and the acquisition of shares by the company are explained on page 77 of the annual report. The General Meeting may resolve to reduce the issued capital by cancelling shares or reducing the nominal value of the shares by amendment to the Articles of Association. For further information, see the company’s Articles of Association, which are posted on the company’s website.

j) The service agreement entered into with Friesland Bank N.V. in 2006 states that, in the event of a specifically defined change in BinckBank’s control structure, Friesland Bank N.V. will be entitled to terminate the agreement.

k) Information on the severance arrangements for members of the Management Board is given in the remuneration report for the 2008 financial year.

Fi n a n c i a l S t a t e m e n t s

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Financial Statements 2008 BinckBank N.V.

Consolidated Financial StatementsConsolidated balance sheet ....................................................................................................................90Consolidated income statement .............................................................................................................91Consolidated cash flow statement ........................................................................................................ 92Consolidated statement of changes in equity .....................................................................................94Notes to the consolidated financial statements .................................................................................96Notes to the consolidated balance sheet ............................................................................................ 114Notes to the consolidated income statement ....................................................................................133

Company Financial StatementsCompany balance sheet ..........................................................................................................................150Company income statement .................................................................................................................. 151Company statement of changes in equity .......................................................................................... 152Notes to the company financial statements .......................................................................................154Notes to the company balance sheet ................................................................................................... 155

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Consolidated balance sheet

Notes 31 December 2008 31 December 2007x € 1,000 x € 1,000

AssetsCash and balances with central banks 8 39,289 9,522 Banks 9 244,412 422,028 Financial assets held for trading 10 - 63 Financial assets at fair value through profit and loss 11 37,033 268,617 Available-for-sale financial assets 12 1,298,233 8,117 Loans and receivables 13 227,725 497,762 Held-to-maturity investments 14 12,558 623,498 Investments in associates 15 2,675 605 Intangible assets 16 378,338 407,014 Property, plant and equipment 17 9,218 6,342 Current tax assets 18 4,623 7,396 Deferred tax assets 19 5,980 6,843 Other assets 20 9,311 7,689 Prepayments and accrued income 21 35,774 23,659 Derivative positions held on behalf of clients 22 273,225 455,240

Assets of disposal group classified as held for sale 7 - 12,031

Total assets 2,578,394 2,756,426

Equity and liabilitiesCustomer deposits 23 1,747,699 1,772,822 Financial liabilities measured at amortised cost 24 - 1,080 Provisions 25 93 416 Current tax liabilities 18 201 217 Deferred tax liabilities 19 8,116 82 Other liabilities 26 48,069 31,454 Accruals and deferred income 27 23,350 22,152 Derivative positions held on behalf of clients 22 273,225 455,240

Liabilities directly associated with assets heldfor sale 7 - 6,147

Total liabilities 2,100,753 2,289,610

Shareholders’ equity 28 477,641 466,816

Total equity and liabilities 2,578,394 2,756,426

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Consolidated income statement

Notes 2008 2007x € 1,000 x € 1,000

Revenue

Interest income 95,500 28,070 Interest expense (54,860) (10,125)

Net interest income 29 40,640 17,945

Commission income 139,577 68,606 Commission expense (38,396) (22,609)

Net commission income 30 101,181 45,997

Other operating income 31 6,162 5,504

Result on investments 32 1,230 286

Impairment losses/reversals on financial assets and liabilities 33 (205) (1,089)

Total revenue from operating activities 149,008 68,643

Expenses

Emloyee expenses 34 38,443 17,450 Depreciation and amortisation 35 31,789 1,699 Other operating expenses 36 37,316 14,190

Total expenses 107,548 33,339

Result from continuing operations 41,460 35,304

Share in profits (losses) of associates 15 520 80

Result before tax 41,980 35,384

Income tax expense 18 (8,941) (4,785)

Result after tax from continuing operations 33,039 30,599

Result after tax from discontinued operations 7 106 1,556

Net profit for the year 33,145 32,155

EPS on continuing operations (€) 0.43 0.93EPS on discontinued operations (€) 0.00 0.05

Earnings per share (€) 37 0.43 0.98

Diluted EPS on continuing operations (€) 0.43 0.93Diluted EPS on discontinued operations (€) 0.00 0.05

Diluted earnings per share (€) 38 0.43 0.98

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Notes 2008 2007x € 1,000 x € 1,000

Consolidated cash flow statement

Cash flow from operating activities

Net profit for the year 33,145 32,155

Adjustments for:Amortisation of intangible assets and depreciation of property, plant and equipment 16,17 31,822 1,894 Provisions 25 (323) (29)Impairment losses on loans and receivables 13 205 1,089 Movements in deferred tax 19 5,492 (3,907)Share in undistributed profits of associates 15 (520) (80)Other non-cash movements (including discontinued operations) (1,509) 651

Movements in:Banks - 37,871 Financial assets held for trading 10 63 31,435

Financial assets at fair value through profit and loss 11 231,584 (268,617)

Loans and receivables 13 270,665 (72,110)Taxes, other assets and prepayments and accrued income 18,20,21 (10,964) 19,488 Customer deposits 23 (25,123) 134,711 Financial liabilities held for trading - (9,328)Tax liabilities, other liabilities, accruals and deferred income 18,26,27 17,784 (10,586)

Net cash flow from operating activities 552,321 (105,363)

Cash flow from investing activities

Available-for-sale financial assets 12 (1,276,013) - Held-to-maturity financial assets 14 610,940 24,545 Investments in operations/subsidiaries adjusted for acquired cash 6 - (12,009)Disposals of subsidiaries 7 610 - Investments in associates 15 (1,200) (525)Dividends received 15 40 - Investments in intangible assets 16 (1,539) (4,197)Investments in property, plant and equipment 17 (5,217) (2,712)

Net cash flow from investing activities (672,379) 5,102

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Consolidated cash flow statement (continued)

Cash flow from financing activities

Share issue - 376,165 Proceeds from the sale of rights attaching to treasury shares 28 - 422 Buy-back of own shares 28 (5,519) - Financial liabilities at amortised cost 24 (1,080) (240)Dividends paid-Final dividend for preceding year 39 (11,560) (8,874)-Interim dividend for the year 39 (15,413) (4,299)

Net cash flow from financing activities (33,572) 363,174

Net cash flow (153,630) 262,913

Opening balance of cash and cash equivalents 437,331 174,418 Closing balance of cash and cash equivalents 283,701 437,331

Movement (153,630) 262,913

The cash and cash equivalents presented in the consolidated cash flow statement are included in the consolidated balance sheet under the following headings at the amounts stated below:

Cash 8 39,289 9,522 Banks 9 244,412 422,028 Cash and cash equivalents in assets held for sale 7 - 5,781

Total 283,701 437,331

Cash flow from operating activities includes the following items:- Tax paid (6,168) (6,490)- Interest received 82,021 22,018 - Interest paid (56,064) (9,108)- Commission received 139,543 68,545 - Commission paid (38,841) (21,437)

Notes 2008 2007x € 1,000 x € 1,000

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Note Issued

share

capital

Share

premium

Treasury

shares

Fair

value

reserve

Unappro-

priated

profi t

Other

reserves

Total

equity

1 January 2008 7,709 392,395 (487) (1,342) 32,155 36,386 466,816

Unrealised gain on available-for-sale assets (after tax) 28 - - - 10,466 - - 10,466Realised gains and losses in profit and loss 28 - - - (292) - - (292)Gains and losses on exchange 28 - - - - - (139) (139)

Results recognised directly in equity - - - 10,174 - (139) 10,035

Net profit for the year - - - - 33,145 - 33,145

Total income and expense - - - 10,174 33,145 (139) 43,180

Payment of final dividend 39 - - - - - (11,560) (11,560)

Payment of interim dividend 39 - - - - - (15,413) (15,413)

Grant of rights to shares 28 - - - - - 58 58

Payment of stock option shares 28 - - 115 - - (115) -

Payment of bonus shares 28 - - 139 - - (139) -

Exercise of options 28 - - 129 - - (50) 79

Shares acquired from employees 28 - - (5) - - 5 -Buy-back of own shares 28 - - (5,519) - - - (5,519)

Transfer of retained earnings to other reserves - - - - (32,155) 32,155 -

31 December 2008 7,709 392,395 (5,628) 8,832 33,145 41,188 477,641

Consolidated statement of changes in equity(amounts in € x 1,000)

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Note Issued

share

capital

Share

premium

Treasury

shares

Fair

value

reserve

Unappro-

priated

profi t

Other

reserves

Total

equity

1 January 2007 3,084 20,855 (956) (649) 24,009 24,946 71,289

Unrealised loss on available-for-sale assets (after tax) 28 - - - (693) - - (693)Gains and losses on exchange 28 - - - - - (125) (125)

Results recognised directly in equity - - - (693) - (125) (818)

Profit for the year - - - - 32,155 - 32,155

Total income and expense - - - (693) 32,155 (125) 31,337

Payment of final dividend 39 - - - - - (8,874) (8,874)

Payment of interim dividend 39 - - - - - (4,299) (4,299)

Grant of rights to shares 28 - - - - - 535 535

Payment of stock option shares 28 - - 74 - - (74) -

Payment of bonus shares 28 - - 17 - - - 17

Exercise of options 28 - - 378 - - (154) 224

Issue of shares 28 4,625 380,225 - - - - 384,850

Cost of share issue 28 - (8,685) - - - - (8,685)

Proceeds from sales of rights attaching to treasury shares 28 - - - - - 422 422

Transfer of retained earnings to other reserves - - - - (24,009) 24,009 -

31 December 2007 7,709 392,395 (487) (1,342) 32,155 36,386 466,816

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Notes to the consolidated financial statements

1. General

Company informationBinckBank N.V., established and registered in the Netherlands, is a public limited liability company incorporated under Dutch law, whose shares are publicly traded. BinckBank N.V. is officially domiciled at Vijzelstraat 20, 1017HK Amsterdam. BinckBank N.V. provides conventional and internet broking services in securities and derivative transactions for private and professional investors. The subsidiary Syntel Beheer B.V. specialises in developing software for financial institutions for processing and accounting for securities transactions. In the following pages, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and its various subsidiaries.

BinckBank’s consolidated financial statements for the year ended 31 December 2008 have been prepared by the company’s Management Board and approved for publication pursuant to a formal decision taken by the Management Board and the Supervisory Board on 6 March 2009. The financial statements for 2008 will be adopted at the General Meeting of Shareholders to be held on 28 April 2009.

Management Board: Supervisory Board:T.C.V. Schaap C.J.M. ScholtesP. Aartsen J.K. BrouwerN. Bortot L. DeuzemanE.J.M. Kooistra A.M. van Westerloo

Presentation of the financial statementsThe consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board and endorsed by the European Commission.

Unless otherwise stated, the financial statements are in euros, with all amounts rounded to the nearest thousand.

Implications of new standardsThe IASB and the IFRIC have issued new standards, amendments to existing standards and interpretations of standards which have not yet come into operation or have not yet been endorsed by the European Union.

BinckBank has implemented the following IFRSs and IFRIC interpretations which are mandatory with effect from 2008.

IFRIC 11 IFRS 2 – Group and Treasury Share Transactions has been issued and is mandatory for annual periods beginning on or after 1 March 2007. The standard has no material implications for BinckBank’s consolidated financial statements.

IFRIC 12 – Service Concession Arrangements has been issued and is mandatory for annual periods beginning on or after 1 January 2008, but is not relevant to BinckBank.

IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction, clarifies the situation concerning the fact that assets relating to defined benefit plans may only be recognised in the balance sheet if they embody economic benefits in the form of refunds under a defined benefit plan or a reduction in the future contributions to the plan. The interpretation applies to certain of the group’s defined benefit plans but is not expected to have any material consequences for the consolidated financial statements because the plans are being discontinued.

The amendment to IAS 39 – Financial Instruments: Recognition and Measurement and IFRS 7 – Financial Instruments: Disclosures – Reclassification of Financial Assets, issued in October 2008 with effect from 1 July 2008, permits the reclassification of financial assets (other than derivatives) from financial assets at fair value through profit or loss to available-for-sale financial assets or to held-to-

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maturity financial assets under certain conditions. The amendment also permits the reclassification of financial assets from financial assets at fair value through profit or loss and from available-for-sale financial assets to loans and receivables under certain conditions. BinckBank has not made use of the option of reclassifying the financial assets.

The following standards and interpretations have not yet been applied by BinckBank:

In May 2008, the IASB issued its first omnibus exposure draft of amendments to existing standards which will become mandatory with effect from 1 January 2009. The implementation of these standards and interpretations is not expected to have any material consequences for the financial statements. With effect from the date on which the new standards and interpretations become mandatory, certain additional information will be required in the financial reporting and will be duly included.

IAS 32 and IAS 1 Amendment – Puttable Financial Instruments and Obligations Arising on Liquidation and IFRS 1 and IAS 27 Amendment – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate, both mandatory with effect from 1 January 2009, will not have any consequences for the consolidated financial statements at this stage.

IFRS 2 Amendment – Vesting Conditions and Cancellations, issued in January 2008 and mandatory with effect from 1 January 2009 and clarifying the definition of share-based payments and the accounting treatment of cancellations, is not expected to have any consequences for the consolidated financial statements.

IFRS 8 - Operating Segments, issued in November 2006 and mandatory with effect from 1 January 2009, which introduces the requirement that the financial and descriptive information which is reported concerning business segments should be

the same as the information which is used internally for evaluating the results of the business segments and for decisions concerning the allocation of resources. BinckBank uses the same performance indicators and the same reporting structures for internal performance measurement as it does for external reporting and this new standard is therefore not expected to have any implications for the consolidated financial statements.

The amendment to IAS 23 – Borrowing Costs, issued in March 2007 and mandatory with effect from 1 July 2009, which removes the option of recognising the costs of borrowings directly relating to the acquisition, construction or production of qualifying assets as an expense as and when incurred. This amendment will not have any implications for the consolidated financial statements since BinckBank does not make use of the option.

IFRS 3R – Business Combinations will not have any implications for the consolidated financial statements and IAS 27 Amendment – Consolidated and Separate Financial Statements will have only minor implications for the disclosures in the financial statements.

IFRIC 13 – Customer Loyalty Programmes, mandatory with effect from 1 July 2009, IFRIC 15 – Agreements for the Construction of Real Estate, mandatory with effect from 1 January 2009, and IFRIC 16 – Hedges of a Net Investment in a Foreign Operation, mandatory with effect from 1 October 2009, will not have any implications for the consolidated financial statements.

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Changes in accounting policies, estimates and presentationThe accounting policies are consistent with those applied in the previous year with the exception of the changes explained below.

Change in presentationIn 2008, BinckBank revised the structure and presentation of the financial statements with the object of bringing them into line with the required categorisation of the financial assets and liabilities under IFRS. This has led to reclassifications in the format of the balance sheet and a reclassification in the income statement with respect to the impairment of financial instruments. The changes in the presentation of the balance sheet are shown below.

Significant accounting judgements and estimatesThe preparation of the financial statements involves making assumptions and estimates on the recognition and measurement of assets and liabilities, contingent rights and liabilities and income and expense items. The most significant assumptions for the future and other key sources of estimation uncertainty at the balance sheet date

that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are:

Impairment of goodwillAt least once a year BinckBank performs an impairment test on the carrying amount of goodwill. This involves estimating the value in use of the cash-generating units to which the goodwill is attributed. In order to estimate the value in use, BinckBank makes an estimate of the expected future cash flows from the cash-generating unit and also determines a suitable discount rate for calculating the net present value of those cash flows.

Fair value of identified intangible assets acquired with acquisitionsBinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method

Financial Statements presentation change 2008 figures 2007 figures 31 December 2007 31 December 2007

x € 1,000 x € 1,000

Interest-bearing securities - 900,232 Financial assets at fair value through profit and loss 268,617 - Available-for-sale financial assets 8,117 - Held-to-maturity financial assets 623,498 -

900,232 900,232

Financial liabilities measured at amortised cost 1,080 - Tax 217 - Other liabilities 31,454 32,751

32,751 32,751

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is used, an estimate is also made of the appropriate royalty percentage. An impairment test is performed on each balance sheet date.

Fair value of financial instrumentsWhere the fair value of financial assets and financial liabilities cannot be obtained from active markets, it is arrived at using valuation methods including discounted cash flow models. Observable market data is used as the input to these models wherever possible but, where this is not possible, judgements are required in determining fair values. These judgements involve considering things like liquidity risk, credit risk and volatility as inputs. Changes in assumptions regarding these factors can affect the fair value of financial instruments.

Impairment of loans and receivablesBinckBank performs periodical tests to ascertain whether the fair value of the securities portfolio serving as collateral for securities lending is sufficient to cover this lending. If the collateral provided by the securities portfolio is found to be inadequate, an impairment loss is indicated. BinckBank makes individual estimates of the future cash flows, proceeds from execution of collateral net of transaction costs and the costs of collecting the receivables. BinckBank assesses periodically whether any changes have taken place which necessitate an adjustment of the provision for impairment losses.

Deferred tax assetsDeferred tax assets are recognised if it is probable that future taxable profits will be generated to allow the tax loss carryforwards to be utilised.

2. Basis of consolidation

The consolidated financial statements include the assets and liabilities and the income and expense items of the company and its subsidiaries. Subsidiaries are entities over which BinckBank has control. Control is deemed to exist if BinckBank is able, either directly or indirectly, to govern the financial and operating policies of the company so as to obtain benefits from its activities.

Subsidiaries are fully consolidated as soon as BinckBank obtains control. If BinckBank ceases at any point to control a subsidiary, the subsidiary will be immediately deconsolidated.

The accounting policies of the subsidiaries and their reporting periods are the same as those of BinckBank.

3. Related party disclosures

Unrealised gains on transactions with associates are eliminated in proportion to BinckBank’s interests in the companies concerned.

There were transactions between BinckBank and its subsidiaries during the year. These intercompany transactions have been eliminated in the consolidated financial statements.

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4. Recognition and measurement of assets, equity and liabilities

Foreign currency translationThe consolidated financial statements are in euros, this being BinckBank’s functional as well as presentation currency. Items recognised in the financial statements of each entity are measured on the basis of the relevant entity’s functional currency. Transactions in foreign currencies are translated on initial recognition at the functional currency’s exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing on the balance sheet date. Differences relating to movements in exchange rates are recognised in the income statement. Non-monetary items in foreign currencies measured against fair value, are translated at the exchange rate at the moment the fair value is determined. Currency translation differences on non-monetary items carried at fair value through profit or loss are likewise recognised in the income statement.

At the reporting date, the assets and liabilities of entities outside the eurozone are translated into BinckBank’s functional currency (the euro) at the exchange rate prevailing on the balance sheet date while the income statement is translated at the weighted average exchange rate for the year. Translation differences are recognised directly in a separate component of equity. If a non-eurozone entity is sold, the deferred cumulative amount included in equity for the relevant company is recognised in the income statement.

Financial assets and liabilitiesInitial recognition of financial assets in the balance sheetFinancial assets and liabilities bought and sold in accordance with standard market conventions are recognised at the transaction date of the relevant

purchase or sale. Other financial assets and liabilities are recognised in the balance sheet at the time of acquisition.

On initial recognition, financial instruments may be assigned to a specific category, their accounting treatment being decided at that time. Initial recognition of financial assets and liabilities is at fair value, including directly attributable transaction costs, except for the category which is carried at fair value through profit or loss, where the transaction costs are expensed.

Derecognition of financial assets and liabilitiesA financial asset (or a component of a financial asset or part of a group of similar financial assets) is no longer shown in the balance sheet if:• BinckBank ceases to have a right to the cash

flows from the asset; or• BinckBank retains the right to receive the cash

flows from the asset but has entered into an obligation to pay them to a third party in their entirety and without significant delay under the terms of a specific contract; or

• BinckBank has transferred its rights to receive the cash flows from the asset and has either (a) largely transferred all risks and rewards of ownership of the asset or (b) not largely transferred all risks and rewards of ownership of the asset, i.e. retains them, but has transferred control of the asset.

If BinckBank has transferred its rights to receive the cash flows from an asset but has not largely transferred all risks and rewards of ownership of the asset, i.e. retains them, and has not transferred control of the asset, that asset continues to be recognised for as long as BinckBank remains involved with the asset. Financial liabilities cease to be shown in the balance sheet as soon as the performance relating to the obligation has been completed or the obligation has been removed or has expired.

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Loans and receivables and the related impairment losses are written off if there is no longer any real possibility of being able to recover the outstanding debt following execution of the collateral.

Determination of fair valueThe fair value of a financial instrument is based on the market price if there is an active market for that instrument. Financial assets are carried at the bid price, financial liabilities are carried at the offer price and risk off-setting positions are carried at the mid-price, excluding transaction costs.

For certain financial assets and liabilities, a quoted market price is not available. Various valuation methods are used to obtain a fair value for these financial assets and liabilities, ranging from net present value calculations to valuation models taking into account relevant price factors, including market prices of the underlying instruments referred to, market parameters (volatilities, correlations, credit risks) and client behaviour. BinckBank makes exclusive use of third-party valuation models and does not make any estimates of its own with regard to the inputs used. All the valuation methods employed are internally evaluated and approved. The majority of the data used in these valuation methods is validated on a daily basis. Valuation methods are inherently subjective. Measuring the fair value of certain financial assets and liabilities is accordingly largely dependent on estimates. Valuation methods involve various assumptions with respect to price factors. The use of other valuation methods and assumptions might produce estimates of fair values that are materially different.

Offsetting of financial assets and liabilitiesFinancial assets and liabilities are set off against each other and the net amount is presented in the balance sheet when there is a legally enforceable right to set off the amounts and an intention to

settle on a net basis, or realise the asset and settle the liability simultaneously.

Accounting treatment after initial recognitionThe accounting treatment after initial recognition depends on the categories described below.

Financial assets or financial liabilities at fair value through profit or lossAn instrument is classified as carried at fair value through profit or loss if it is held for trading purposes or if it was designated as such on initial recognition for one of the following reasons:• It eliminates or substantially reduces

inconsistencies in measurement and recognition which would otherwise arise on the recognition of assets or of income and expenses on a different basis.

• The performance of the financial asset concerned is assessed on the basis of its fair value in accordance with a documented risk management or investment strategy. Reporting to management is on the basis of fair value.

• The host contract of the financial instruments contains one or more embedded derivatives and the entire contract is recognised at fair value through profit or loss. This is only permissible provided: the embedded derivative has a significant

influence on the contractually agreed cash flows or

it is evident on initial recognition of the financial instruments that separation of the embedded derivative is not permissible (e.g. option of premature settlement at amortised cost).

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Derivatives not held on behalf of clients are regarded as being held for trading purposes. Derivatives are financial instruments requiring only a limited net initial investment or none at all, with future settlement dependent on the underlying notional amount of the contract and movements in certain rates or prices (e.g. an interest rate or the price of a financial instrument). The financial instruments are recognised at fair value. Both unrealised and realised gains and losses are recognised directly in the income statement in the result on investments.

Available-for-sale financial assetsAvailable-for-sale financial assets are those financial assets that are designated as being available for sale or are not included in one of the above categories. After initial recognition, available-for-sale financial assets are measured at fair value. Any gain or loss is shown, net of tax, as a separate component of equity until the investment is derecognised or determined to be impaired. At such time, the cumulative gain or loss previously shown in equity is recognised in the income statement in the result on investments.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition they will be valued at amortised cost, using the effective interest method. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired.

Held-to-maturity financial assetsFinancial assets with fixed or determinable payments and a fixed maturity date are designated

as investments to be held to maturity if BinckBank specifically intends to hold them until maturity and is in a position to do so. Held-to-maturity investments are recognised at amortised cost, measured using the effective interest method, less any impairment losses.

Impairment of financial assetsOn a regular basis and at each balance sheet date, BinckBank assesses whether there is objective evidence, provided by one or more events, of impairment of financial assets individually or groups of financial assets collectively. Impairment losses are only recognised when there is an adverse effect on the future cash flows. If impairment is indicated, the amount of any impairment loss is determined as follows for available-for-sale financial assets, loans and receivables and held-to-maturity financial assets.

Available-for-sale financial assetsIn assessing whether there has been any impairment of available-for-sale financial instruments, account is taken of any significant or prolonged drop in the fair value to below cost. If there is evidence of such a situation, the cumulative net loss previously recognised directly in equity is transferred from equity to the income statement in impairment losses. Reversals of impairment losses relating to investments in shares classified as available for sale are not recognised through profit or loss but directly in equity. Reversals of impairment losses relating to fixed income securities are reversed through the income statement if the increase in the fair value of the instrument can be objectively related to an event occurring after the previous impairment loss was recognised in the income statement.

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Loans and receivablesBinckBank assesses whether there is objective evidence of impairment of the lending portfolio (including any related facilities and guarantees). Evidence that a loan or receivable is impaired is obtained via the group’s lending assessment process. This involves assessment of clients’ creditworthiness as well as assessment of the nature of clients’ investment transactions and monitoring of client transactions and balances.

The amount of any impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the asset. The loss is presented in the income statement in impairment losses. In computing the present value of the estimated future cash flows from a financial asset for which collateral security has been provided, account is taken of the cash flows which will probably arise on execution of the collateral security less the costs which will necessarily be incurred in obtaining and selling the assets provided by way of security.

In the event of impairment, the impairment provision is increased by the amount of the impairment loss. The affected assets are only written down when all the necessary procedures have been completed and the amount of the loss has been determined. If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be objectively related to an event occurring after the initial write-down, the previously recognised impairment loss is reversed. Reversal of an impairment loss is recognised in the provision and in the income statement, provided the carrying amount of the asset does not exceed

the amortised cost at the reversal date. Amounts subsequently collected after having been written off are credited to the income statement in impairment losses.The methodology and the assumptions used in estimating future cash flows are regularly evaluated in order to reduce variances between estimated and actual losses.

Interest income following impairment is recognised on the basis of the original effective interest rate.

Held-to-maturity financial assetsHeld-to-maturity investments are individually assessed and the amount of any impairment loss is measured using the same method as has been explained for loans and receivables.

BinckBank does not regard possible future events as objective indicators and such forecasts are accordingly not used as evidence of impairment of a financial asset or a portfolio of financial assets. Losses based on future events are not recognised, regardless of probability.

Loans and receivables under renewed contractsIn the case of existing loans and receivables, it is possible for renewed contracts to be concluded with clients. Such assets are no longer treated as overdue. The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable.

These loans and receivables are periodically tested for impairment on an individual basis, using the original effective interest rate.

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Cash and cash equivalentsThe balance sheet heading of cash comprises cash at banks and in hand and short-term deposits (call money) with original maturities of three months or less that are readily convertible into known amounts of cash and on which there is a negligible impairment risk.

Investments in associatesAssociates are entities in which BinckBank generally holds between 20% and 50% of the voting rights or in which BinckBank is able to exercise significant influence in some other way but over which BinckBank does not have control. Investments in associates are accounted for using the equity method. The item includes goodwill paid on acquisition, less any cumulative impairment losses. With equity accounting, BinckBank’s share in the results of an associate is recognised in the income statement as share in profits of associates. BinckBank’s share in changes in an associate’s reserves is recognised directly in BinckBank’s equity. The carrying amount of the investment is adjusted for the reported results and changes in reserves. If the carrying amount of the investment in an associate falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate concerned or has already made payments on behalf of the associate. Where necessary, the accounting policies of associates are amended to ensure consistency with those of BinckBank.

Intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Subsequently, intangible assets are carried at cost less cumulative

amortisation and any cumulative impairment losses.Intangible assets are determined as having either a definite or an indefinite useful life. Intangible assets with a definite useful life are amortised over the useful life and tested for impairment if there are indications that an asset may be impaired. The useful lives of the intangible assets are assessed annually and adjusted if there has been a change. Amortisation of intangible assets with a definite useful life is presented in the income statement in depreciation and amortisation.

Intangible assets with an indefinite useful life are subjected to an annual impairment test, either individually or at the level of the cash-generating unit. These intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reassessed annually, including an assessment of whether the indefinite useful life is still justifiable.

The activities relating to research and development of software are recognised and measured as follows:• completion of this intangible asset is technically

feasible, so that it will be available for use or for sale;

• it is BinckBank’s intention to complete the intangible asset and use or sell it;

• BinckBank is capable of using or selling the intangible asset;

• future economic benefits are achievable;• adequate technical, financial and other resources

are available to complete the development of the intangible asset and for its use or sale; and

• it is possible to measure the costs incurred during development reliably.

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After initial recognition of the development costs, the asset is carried at cost less any cumulative amortisation and cumulative impairment losses. Any such capitalised costs are amortised over the period in which the expected future economic benefits from the project concerned are to be realised. The carrying amount of the development costs is tested for impairment annually if the asset is not yet in use or if there are indications of impairment during the year.

Property, plant and equipmentThis item comprises assets intended to be used in the performance of BinckBank’s activities in the long term. It includes fixtures, fittings and equipment in the company’s premises and computer hardware. These assets are carried at cost less cumulative depreciation and any cumulative impairment losses. Depreciation is based on cost and calculated on a straight-line basis over the useful life of the asset. Both the useful life and the residual value of assets are reviewed annually.

TaxTax assets and liabilitiesTax assets and liabilities for current and prior years are carried at the amount expected to be claimed from or paid to the tax authorities. The tax amount is computed on the basis of enacted tax rates and applicable tax law.

Deferred taxDeferred tax liabilities are recognised, based on the temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount in these financial statements. Deferred tax liabilities are recognised for all taxable temporary differences except:

• where the deferred tax liability arises on the initial recognition of goodwill or the initial recognition of an asset or a liability in a transaction that is not a business combination and does not affect the operating profit before tax or the taxable profit;

• in the case of taxable temporary differences connected with investments in subsidiaries and associates, where BinckBank is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, unused tax facilities and unused tax loss carryforwards when it is probable that taxable profits will be available against which the deferred tax asset can be utilised, enabling the deductible temporary differences, unused tax facilities and unused tax loss carryforwards to be used.

The carrying amount of the deferred tax assets is assessed at the balance sheet date and reduced if it is not probable that sufficient taxable profits will be available against which some or all of the deferred tax asset can be utilised. Unrecognised deferred tax assets are reassessed at the balance sheet date and recognised to the extent that it is probable that taxable profits will be available in the future against which the deferred tax asset can be utilised. Deferred tax assets and liabilities are carried at amounts measured at the tax rates expected to be applicable to the period in which the asset is realised or the liability is settled, based on enacted tax rates and applicable tax law. The tax on items recognised directly in equity is accounted for directly in equity instead of in the income

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statement. Deferred tax assets and liabilities are presented as a net amount if there is a legally enforceable right to set off deferred tax assets against deferred tax liabilities and the deferred tax is related to the same taxable entity and the same tax authority.

Other assetsIncluded in this item are other receivables and other investments. The receivables included in this item are carried at amortised cost less any impairment losses. Other investments are carried at fair value. If the fair value cannot be measured reliably, the assets are carried at cost. If reliable fair value measurement cannot be achieved, the reason is disclosed, where possible along with the bandwidth within which estimates of the fair value probably lie.

Work in progressWork in progress is carried at the cost of the work performed, plus a proportion of the expected final results based on progress and less invoiced instalments, prepayments and provisions. For anticipated losses on work in progress, provisions are recognised as soon as such losses are identified and are deducted from the cost, any already recognised profits also being reversed. The cost comprises the direct project costs, made up of direct wage costs, materials, costs of subcontracted work, other direct costs and charges for the hire and maintenance of the equipment used. The progress of the project is measured on the basis of the cost of the work performed in relation to the expected cost of the project as a whole. Profits are not recognised on work in progress before it is possible to make a reliable estimate of the final result. For each project, the balance of the value of the work in progress less invoiced instalments and

prepayments is measured. In the case of projects on which the invoiced instalments and prepayments exceed the value of the work, this balance is included in current liabilities instead of current assets.

Derivative positions held on behalf of clientsBinckBank executes derivatives transactions on behalf of its clients and holds the resultant positions in its own name but for the client’s account and at the client’s risk. The positions are recognised at fair value, measured according to the quoted price at the balance sheet date. Financial settlement with the clients concerned in respect of such transactions and positions is effected immediately. The clients have lodged adequate collateral with BinckBank in the form of cash balances, bank guarantees and securities to cover the risks arising out of the derivative positions held.

Acquisitions and goodwillAll acquisitions are accounted for using the purchase method. The identifiable assets, equity and liabilities of the acquired company or activities are recognised at fair value.

On initial recognition, goodwill acquired in a business combination is measured as the difference between the cost of the business combination and BinckBank’s share of the net fair value of the acquired company’s identifiable assets, liabilities and contingent liabilities, if positive. Subsequently, goodwill is carried at cost less any cumulative impairment losses. A negative difference between cost and fair value is expensed immediately.

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. For this

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impairment test, goodwill acquired in a business combination is allocated to BinckBank’s cash-generating units or groups of cash-generating units that are expected to benefit from the synergy of the business combination.

An impairment loss is measured by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is the higher of an asset’s net selling price and its value in use. If the recoverable amount is lower than the carrying amount, an impairment loss is recognised. Impairment of goodwill is not reversed.

Necessary adjustments to the fair value of acquired assets, equity and liabilities measured at the time of acquisition that are identified before the end of the first reporting period after the business combination result in an adjustment of the goodwill. Necessary adjustments identified at a later date are recognised through profit or loss. Gains and losses on the disposal of a company or activity are measured as the difference between the proceeds from disposal and the carrying amount of the company or activity, including goodwill and currency translation reserve.

Impairment of assetsThe carrying amount of BinckBank’s assets is tested at each balance sheet date in order to determine whether there are indications of impairment. If so, the recoverable amount of the asset is estimated. The recoverable amount is the higher of an asset’s net selling price and its value in use. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit exceeds the recoverable amount.

Customer depositsSavings comprise the balances on savings accounts of personal banking customers. Savings are measured at fair value on initial recognition, including transaction costs incurred. Savings are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest method, is recognised in the income statement under the heading of interest expense over the term to maturity of the accounts concerned.

Demand deposits relate to non-subordinated liabilities to non-banks that are not embodied in debt securities. These liabilities are measured at fair value on initial recognition, including transaction costs incurred. They are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest method, is recognised in the income statement under the heading of interest expense over the term to maturity of these liabilities to clients.

ProvisionsA provision is recognised if (I) BinckBank has a present obligation (legal or constructive) as a result of a past event; (II) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and (III) a reliable estimate can be made of the amount of the obligation. If BinckBank expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions

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are discounted at a rate, before tax, that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

PensionsBinckBank has pension arrangements for members of its Management Board and staff based on a defined contribution plan, under which a percentage of employees’ fixed salary is paid to a pension insurer. The percentage payable is age- related. The pension contributions are recognised in the year to which they relate.

Through its subsidiary Syntel Beheer B.V., BinckBank has a defined benefit pension plan which is also insured with a pension provider. The costs of the defined benefit plan are individually determined on an actuarial basis using the projected unit credit method. Actuarial gains and losses are recognised as income or expense if the net cumulative unrecognised actuarial gains and losses at the end of the preceding year for each plan separately amount to more than 10% of the greater of the defined benefit obligation and the fair value of the plan assets at that date. These gains or losses are divided over the expected average remaining working lives the employees participating in the separate plans. If the benefits under a pension plan are amended, that portion of the cost of the amended benefit obligation which relates to past service is recognised as an expense in the income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested, the past service cost is expensed immediately.

The net obligation under the defined benefit plan is the total of the present value of the defined benefit obligation and the unrecognised actuarial gains and losses less the as yet unrecognised amended benefits and the fair value of the plan assets out of which the obligations have to be directly settled.The defined benefit pension scheme for Syntel emplyees was ended at year-end 2008, at which time final settlement took place and the accumulated benefit entitlements remained with the insurer. With effect from 1 January 2009, all Syntel staff have been transferred to the BinckBank N.V. defined contribution plan. This decision was taken and communicated to the pension scheme members before 31 December 2008. The effects have been accounted for in the 2008 financial year.

Other liabilitiesAll loans are carried on initial recognition at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans are subsequently carried at amortised cost calculated using the effective interest method.

Shareholders’ equityThe costs associated with the issue of new shares are charged to the share premium account.

Repurchase of own sharesEquity instruments which are reacquired (treasury shares) are deducted from equity. Gains or losses on the purchase, sale, issue or withdrawal of BinckBank’s own equity instruments are not recognised in the income statement.

Share-based paymentsMembers of BinckBank’s Management Board and a group of BinckBank staff receive remuneration in

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the form of share-based payments. These payments are settled either by issuing equity instruments of the company or by cash payment.

Equity-settledThe cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (i.e. the date on which these rights become unconditional). The cumulative expense recognised for equity-settled transactions at each reporting date reflects the extent to which the vesting period has expired and BinckBank’s best estimate of the number of equity instruments that will ultimately be vested. The expense charged to the income statement for a period reflects the movement in cumulative expense recognised at the beginning and end of that period.

Cash-settledA liability is recognised in respect of cash-settled share-based payments. The fair value of the cash-settled share-based payments is determined at each balance sheet date.

LeasingIn the case of operating leases where BinckBank is lessee, the lease payments are charged to the income statement on a straight-line basis over the lease period.

Liabilities not shown on the face of the balance sheetContingent liabilities are liabilities that are not recognised in the balance sheet because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within BinckBank’s control. The maximum potential credit risk associated with these contingent liabilities faced by BinckBank is disclosed in the notes. In estimating the maximum potential credit risk, it is assumed that all counterparties default on their contractual obligations and all assets provided by way of collateral security are worthless.

Earnings per ordinary shareThe earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders for the period by the weighted average number of shares in issue during the period. The diluted earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of shares during the period, adjusted for possible dilution resulting for example from outstanding option rights.

Cash flow statementThe cash flow statement has been prepared using the indirect method. This statement provides an insight into the source of the funds and the way in which these funds have been applied. The cash flows are analysed according to operating, investing and financing activities. Cash includes the cash in hand together with freely available balances on deposit with central banks and other financial instruments with maturities of less than three months from the date of acquisition. Where material, movements associated with currency

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translation differences are eliminated. The cash flow statement includes the cash flows from the assets and liabilities held for sale.

5. Recognition and measurement of income and expenses

GeneralIncome and expense items are recognised in the period to which they relate, having due regard to the above accounting policies for the recognition and measurement of assets, equity and liabilities. Revenues are recognised if it is probable that their economic benefits will flow to BinckBank and the revenue can be reliably measured.

Interest income and expenseInterest income and expense is recognised in the year to which it relates. Interest income is measured using the effective interest method. The accrued interest income recognised on securities in portfolio is included in the interest margin.

Commission income and expenseCommission income and expense comprises payments, excluding interest, received or receivable from third parties and paid or payable to third parties, respectively, whether on a non-recurring or more regular basis, in respect of services provided.

Other incomeOther income comprises amounts charged to third parties during the year in respect of goods and services supplied relating to hardware and

software, together with the income from other investments.

The income from other investments is attributed to the year to which it relates. Dividends received from other investments are recognised as soon as the right to receive payment is acquired. Realised gains and losses on the fair value of the other investments are recognised in other income.

Work in progress on contracts for third partiesBinckBank uses the percentage of completion method to measure the revenue generated by each contract on the balance sheet date. The percentage of completion is determined by comparing the total estimated costs for a project with the actual costs up to the balance sheet date. BinckBank recognises the positive or negative balance of the revenue less invoiced instalments for each project in other assets or other liabilities, respectively.

Share in profits of associatesThis concerns BinckBank’s share in the results of its associates. If the carrying amount of the investment in an associate falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate concerned or has already made payments on behalf of the associate.

TaxThe tax expense is recognised in the income statement unless the tax relates to items recognised directly in equity, in which case the tax is also recognised in equity.

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6. Business combination

On 31 December 2007, BinckBank acquired the activities of Alex Beleggersbank. Alex Beleggersbank was a Rabobank Group operation. Trading under the Alex label, the company acts as an internet broker in shares, options and other financial instruments, serving private investors. It also provides additional services such as online saving, investment advice and online asset management. Alex is primarily active in the Dutch market. There were no other acquisitions in 2007 and none in 2008.

The acquisition was funded out of the proceeds of the rights issue, totalling € 385 million (before deduction of the issue costs), and available cash. The rights issue was completed on 14 December 2007 (see note 28).

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The fair value of the identifiable assets and liabilities and the goodwill as at the acquisition date was as follows:

Alexfair

Alex carrying

value amountx € 1,000 x € 1,000

Cash and cash equivalents 2 2

Banks 379,429 379,429

Loans and receivables 285,148 285,148

Interest-bearing securities 599,598 599,598Intangible assets- Trading name 31,405 -

- Customer base 131,058 -

- Deposits taken 84,095 -

- Software 3,251 1,251

Property, plant and equipment 2,137 2,137Other assets 155 155

Prepayments and accrued income 11,242 11,242Derivative positions held on behalf of clients 307,633 -

1,835,153 1,278,962

Customer deposits 1,254,568 1,254,568

Other liabilities 11,201 11,201

Accruals and deferred income 13,193 13,193Derivative positions held on behalf of clients 307,633 -

1,586,595 1,278,962

Fair value of the identifiable assets and liabilities 248,558

Purchase price and associated costs- Purchase price 386,900- Transaction costs 4,540

Total 391,440

Fair value of the identifiable assets and liabilities 248,558

Goodwill (see note 16) 142,882

Cash outflow associated with the acquisition:Cash paid (391,440)

Net cash acquired with the subsidiary 379,431

Net cash outflow (12,009)

The goodwill paid on the acquisition of Alex is attributable to the Retail cash-generating unit. This goodwill chiefly represents the value of the staff and the synergistic gains achievable on completion of the integration of the business. Of the intangible assets arising from the acquisition, the following categories can be identified as being assets from which revenue will be generated: the name Alex, the customer base, the deposits received from clients and the software developed in-house by Alex.

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7. Assets and liabilities held for sale and discontinued operations

On 27 July 2007, BinckBank announced its intention to demerge the share trading operations by means of a management buyout. The activities were previously reported under the Trading segment. On 30 June 2008, the share trading activities of Binck Securities B.V. (formerly a 100% subsidiary) were demerged by means of a management buyout . BinckBank N.V. has retained an interest of 39% in the company, which now has the name Accion N.V.

The results presented in the income statement under the heading of discontinued operations are as follows:

2008 2007x € 1,000 x € 1,000

Revenue 2,872 11,114

Expenses (2,730) (9,025)

Result before tax from discontinued operations 142 2,089

Tax (36) (533)

Result after tax from discontinued operations 106 1,556

Earnings per share (in €):Ordinary earnings per share on discontinued operations - 0.05

The comparative figures for 2007 include the results from discontinued operations relating to the bond trading operation. The demerger of the bond trading operation was completed on 1 October 2007 with the transfer of the activities to Florint B.V. BinckBank acquired an interest of 35% in the share capital of the unlisted company Florint B.V. At the time of incorporation, the remaining positions in bonds of the Binck Securities B.V. bond trading operations were sold at fair value (€ 4.2 million) to Florint B.V.

The balance sheet items presented as discontinued operations are as follows:

2008 2007x € 1,000 x € 1,000

Banks - 5,781

Financial assets held for trading - 3,775

Intangible assets - 423

Property, plant and equipment - 188

Other assets - 1,864

Total assets - 12,031

Other liabilities - 6,147

Total liabilities - 6,147

The net cash flows from the discontinued operations were as follows:

2008 2007x € 1,000 x € 1,000

Cash flow from operating activities (1,212) 49,684

Cash flow from investing activities - (621)

Cash flow from financing activities (4,569) (9,000)

Total net cash (outflow)/inflow (5,781) 40,063

Opening balance of cash and cash equivalents 5,781 (34,282)

Closing balance of cash and cash equivalents - 5,781

Movements in net cash (5,781) 40,063

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Notes to the consolidated balance sheet

31 December 2008 31 December 2007x € 1,000 x € 1,000

Assets

8. Cash and balances with central banks 39,289 9,522

This item includes all cash in legal tender, including bank notes and coins in foreign currency, and any credit balances available on demand from the central banks in countries where BinckBank has offices.

9. Banks 244,412 422,028

This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises:Credit balances available on demand 174,412 392,028 Call money 70,000 30,000

244,412 422,028

The call money receivables have original maturities of less then three months. Interest is received on these balances at a variable rate based on EONIA or EURIBOR.

10. Financial assets held for trading - 63

This item comprises:Derivatives trading portfolio - 63

- 63

11. Financial assets at fair value through profit and loss 37,033 268,617

This item comprises:Government bonds/government-guaranteed bonds - 123,988 Other bonds 37,033 144,629

37,033 268,617

The portfolio of interest-bearing securities which is carried at fair value with gains and losses recognised in the income statement concerns an actively managed portfolio of bonds with individual maturities ranging from 0 to 3 years. The fair value of the portfolio is measured on a daily basis as part of the performance assessment and in connection with portfolio risk management.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

12. Available-for-sale financial assets 1,298,233 8,117

This item comprises:Government bonds/government-guaranteed bonds 652,581 - Other bonds 645,652 8,117

1,298,233 8,117

Movements in available-for-sale financial assets were:Carrying amount as at 1 January 8,117 9,047 Purchases 2,580,397 - Sales (1,278,833) - Redemptions (25,551) - Revaluation gains and losses 14,103 (930)

Carrying amount as at 31 December 1,298,233 8,117

13. Loans and receivables 227,725 497,762

This item comprises receivables from private sector clients, including overnight loans and overdrafts that are collateralised by securities and bank guarantees (lending against securities).

The analysis is as follows:Public sector loan - 5,000 Receivables collateralised by securities 225,028 490,560 Receivables collateralised by bank guarantees 2,140 2,144 Other receivables 1,034 1,163

Loans and receivables, gross 228,202 498,867 Less: impairment provision (477) (1,105)

Loans and receivables, net 227,725 497,762

The interest rate is based on EURIBOR or EONIA. Other receivables refers to remaining amounts receivable after execution of collateral (securities and bank guarantees).

The changes in impairment provisions were as follows:Carrying amount at 1 January 1,105 16 Added 295 1,105 Recovered (90) (16)Written off (833) -

Carrying amount at 31 December 477 1,105

The impairment provision is calculated on a specific basis.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

14. Held-to-maturity financial assets 12,558 623,498

This item comprises:Government bonds 12,558 16,875 Private loans to credit institutions - 7,025 Commercial paper (government-guaranteed) - 599,598

12,558 623,498

15. Investments in associates 2,675 605

This item comprises:Florint B.V. 1,085 605 Accion N.V. 390 - Loan to Accion N.V. 1,200 -

2,675 605

Movements during the year were as follows:

Carrying amount as at 1 January 605 - Capital increases and acquisitions 1,590 525 Dividends and capital refunds (40) - Share in results 520 80

Carrying amount as at 31 December 2,675 605

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Summary of principal associates

2008 Country Interest Share in equity

Share in results

Assets Liabilities

Florint B.V. Netherlands 35% 1,085 520 17,309 14,210 Accion N.V. Netherlands 39% 390 - 4,645 3,645

1,475 520 21,954 17,855

2007 Country Interest Share in equity

Share in results

Assets Liabilities

Florint B.V. Netherlands 35% 605 80 2,217 489

605 80 2,217 489

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31 December 2008 31 December 2007x € 1,000 x € 1,000

16. Intangible assets 378,338 407,014

The movements in 2008 were as follows:

Brand name

Customer deposits

Customer base

Software Goodwill Total

Carrying amount as at 1 January 2008

31,405

84,095 131,802

6,783

152,929 407,014

Investments - - - 1,539 - 1,539 Disposals - cost - - - (1,911) - (1,911)Disposals - cumulative amortisation - - - 1,911 - 1,911 Amortisation (6,281) (8,410) (13,291) (1,628) - (29,610)Reclassification - - - (605) - (605)

Carrying amount as at 31 December 2008 25,124 75,685 118,511 6,089 152,929 378,338

Cost 31,405 84,095 131,988 9,118 152,929 409,535 Cumulative amortisation and impairment (6,281) (8,410) (13,477) (3,029) - (31,197)

Carrying amount as at 31 December 2008 25,124 75,685 118,511 6,089 152,929 378,338

Amortisation period in years 5 10 5 - 10 5

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The movements in 2007 were as follows:

Brand name

Customer deposits

Customer base

Software Goodwill Total

Carrying amount as at 1 January 2007 - - 930 1,700 8,881 11,511

Investments - - - 2,601 1,166 3,767Acquisition of Alex 31,405 84,095 131,058 3,251 142,882 392,691Amortisation - - (186) (769) - (955)

Carrying amount as at 31 December 2007 31,405 84,095 131,802 6,783 152,929 407,014

Cost 31,405 84,095 131,988 10,233 152,929 410,650Cumulative amortisation and impairment - - (186) (3,450) - (3,636)

Carrying amount as at 31 December 2007 31,405 84,095 131,802 6,783 152,929 407,014

Amortisation period in years 5 10 5 - 10 5

The acquisition of Alex Beleggersbank was completed on 31 December 2007. The amortisation of the separately identified intangible assets relating to this transaction amounted to nil in 2007.

Software includes purchased software and proprietary software developed by Syntel, which is sold to its clients, as well as Syntel-developed software for supporting BinckBank’s operations. The hours charged to these software development projects have been capitalised by BinckBank as software at an average hourly rate reflecting only direct staff costs.

Goodwill relates to the excess of the purchase price paid to acquire the activities of Alex Beleggersbank in 2007 and Syntel in 2006 over the fair value of the identifiable assets and liabilities. The purchase price for Syntel comprises an initial price and an earn-out price depending on the gross margin generated by Syntel in 2007 and 2008. Syntel’s performance in 2007 and expected performance in 2008 in fact resulted in the recognition of the maximum earn-out price of € 1,166,000 in 2007. Payment of the additional purchase price occurred in 2008 (see note 26).

The reclassification relates to a revised classification of assets recognised on initial recognition of Alex and involves the categories of intangible assets, property, plant and equipment and prepayments and accrued income.

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Impairment testing of intangible assets (excluding goodwill)The various categories of intangible assets, other than goodwill, are tested annually or more frequently if events or changes in circumstances indicate that the carrying amount, less applicable annual amortisation, may be impaired. In the first instance, the test is made on the basis of the indicators mentioned in IAS 36.12, augmented by indicators compared with the assumptions on which the valuation of the identified immaterial assets was based at the time of the acquisition.

Intangible asset IndicatorBrand Reputational damage to the

Alex brandDecision to limit the use of the Alex brand

Core deposits Less core deposits under the Alex brand compared to purchase dateLower interest margin compared to purchase date

Customer relationships

Higher attrition rate in Alex accounts compared purchase dateLower revenues per acquired account than forecast at purchase date

Software Decision to limit the use of the acquired software

(General) Higher market rates adverse effect on the discount rate

If the test reveals an indication of impairment, BinckBank performs a full calculation of the recoverable amount of the cash-generating units. This calculation is made in the same way as that described for the calculation of the value in use.

Goodwill impairment testGoodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The goodwill has been allocated to the following individual cash-generating units:

2008 2007x € 1,000 x € 1,000

Retail 142,882 142,882 Syntel 8,014 8,014 Business process outsourcing (BPO) 2,033 2,033

152,929 152,929

The cash-generating unit RetailThe goodwill allocated to the cash-generating unit Retail concerns the goodwill arising on the acquisition of Alex Beleggersbank. The activities of Alex Beleggersbank are a close fit with BinckBank’s retail activities in the Netherlands, with their focus on private investors.

Principal assumptions used in calculating the value in useThe recoverable amount of the cash-generating units is based on the value in use. Use has been made of cash flow projections over a period of five years, based on financial estimates used by management for setting targets. The cash flows beyond the five-year horizon have been extrapolated, using growth rates of between 0% and 2%. Management has compared the principal assumptions against market estimates and market expectations.

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The following assumptions have been used:

2008Retail Syntel BPO

Discount rate 11.86% 10.82% 10.82%Expected growth rate beyond five-year horizon 2% 2% 0%

2007Retail Syntel BPO

Discount rate 12.2% 10.51% 10.51%Expected growth rate beyond five-year horizon 2% 2% 0%

Principal assumptions used in calculating the value in use of Alex Beleggersbank as at 31 December 2008The principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were:

• Natural attrition rate and inflow of new private investors based on the trends of the past four years. The conservative growth in the number of clients discounted in the expected numbers of transactions and in the amounts of customer deposits and funds invested.

• Interest margin based on the actual interest margin achieved over the past year, allowing for the long-term effect of low interest rates.

• Commission income and expense based on the expected number of transactions and the average commission income and expense per transaction, based on the experience of the past year and adjusted for the effect of unfavourable market conditions.

Principal assumptions used in calculating the value in use of Syntel/BPO activities as at 31 December 2008The principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were:• Estimated sales based on sales for the year

immediately preceding the budget year, applying an annual growth rate of 2%.

• Costs based on standardised costs for the year immediately preceding the budget year, applying an annual rate of increase of 3%.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

17. Property, plant and equipment 9,218 6,342

The movements in 2008 were as follows:

Fixtures and equipment

Computer hardware

Other Total

Carrying amount as at 1 January 2008 1,269 5,060 13 6,342

Additions 244 4,973 - 5,217 Disposals – cost (4,887) (2,852) - (7,739)Disposals – cumulative depreciation 4,887 2,852 - 7,739 Depreciation (511) (1,698) (3) (2,212)Reclassification (186) 57 - (129)

Carrying amount as at 31 December 2008 816 8,392 10 9,218

Cost 1,377 11,610 18 13,005 Cumulative depreciation and impairment (561) (3,218) (8) (3,787)

Carrying amount as at 31 December 2008 816 8,392 10 9,218

Depreciation period in years 5 - 10 5 5

The changes in 2007 were as follows:

Fixtures and equipment

Computer hardware

Other Total

Carrying amount as at 1 January 2007 785 1,811 17 2,613

Additions 426 2,095 - 2,521 Acquisition of Alex 373 1,764 - 2,137 Depreciation (315) (610) (4) (929)

Carrying amount as at 31 December 2007 1,269 5,060 13 6,342

Cost 5,885 8,396 18 14,299 Cumulative depreciation and impairment (4,616) (3,336) (5) (7,957)

Carrying amount as at 31 December 2007 1,269 5,060 13 6,342

Depreciation period in years 5 - 10 5 5

The reclassification relates to a revised classification of assets recognised on initial recognition of Alex and involves the categories of intangible assets, property, plant and equipment and prepayments and accrued income.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

18. Tax

Tax assets 4,623 7,396 These concern corporation tax credits. In 2008, the tax in respect of all preceding financial years was settled in accordance with the returns submitted. The balance as at year-end 2008 relates solely to the reporting period.

Tax liabilities (201) (217)These concern corporation tax payable by subsidiaries which are not part of the tax group.

The reconciliation of the effective tax rate with the tax rate applicable to the consolidated financial statements is as follows:

2008 2008 2007 2007Amount Percentage Amount Percentage

Standard tax rate 10,704 25.5% 9,023 25.5%Effect of different tax rates (in other countries) 1,792 4.3% 305 0.9%Effect of tax loss carryforwards not previously recognised

- 0.0% (4,310) (12.2)%

Effect of substantial-holding privileges (133) (0.3)% (36) (0.1)%Use of tax facilities (3,422) (8.2)% (197) (0.6)%

Total tax expense/tax burden 8,941 21.3% 4,785 13.5%

For the tax expense on the activities not being continued on a permanent basis, see note 7.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

19. Deferred tax

Composition Deferred tax assets 5,980 6,843Deferred tax liabilities (8,116) (82)

Net deferred tax asset / (liability) (2,136) 6,761

Maturity of deferred tax assets< 1 year 2,148 1,388 1 – 5 years 3,832 5,455 > 5 years - -

5,980 6,843

Maturity of deferred tax liabilities< 1 year (3,031) (20)1 – 5 years (1,413) (62)> 5 years (3,672) -

(8,116) (82)

1 January 2008

Income statement

Balance sheet

31 December 2008

Origin of deferred tax assets and liabilitiesTax loss carryforwards 6,774 (794) - 5,980 Available-for-sale financial assets - - (3,406) (3,406)Goodwill and intangible assets - - (2,792) (2,792)Pension provision 69 (69) - - Other (82) (1,836) - (1,918)

Net asset / (liability) 6,761 (2,699) (6,198) (2,136)

1 January 2007

Income statement

Balance sheet

31 December 2007

Origin of deferred tax assets and liabilitiesTax loss carryforwards 2,900 3,874 - 6,774 Available-for-sale financial assets - - - - Goodwill and intangible assets - - - - Pension provision 63 6 - 69 Other (109) 27 - (82)

Net asset / (liability) 2,854 3,907 - 6,761

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31 December 2008 31 December 2007x € 1,000 x € 1,000

The tax loss carryforwards relate to the activities in Belgium and France. Binck België N.V. returned to profitability in 2006. This along with revised future profit expectations for Binck België N.V. allowed an additional € 4.3 million in respect of deferred tax assets to be recognised in 2007. An amount of approximately € 2.1 million was deducted from the deferred tax assets as having been utilised in 2008 (2007: approximately € 0.4 million).

The total tax losses as at year-end 2008 amounted to € 17.7 million (2007: € 19.9 million).

20. Other assets 9,311 7,689

This item comprises:Trade receivables 1,736 1,131 Receivables relating to securities sold, but not yet delivered 6,523 6,413 Other investments 29 29 Other receivables 1,023 116

9,311 7,689 Other receivables have maturities of less than one year.

The other investments concern interests in the share capital of Inmaxxa B.V. and LPE Capital B.V. of less than 5%. These investments are carried at cost in the absence of a reliable measurement of fair value.

21. Prepayments and accrued income 35,774 23,659

This item comprises:Interest receivable 30,543 17,064Commission receivable 2,426 2,392Other prepayments and accrued income 2,805 4,203

35,774 23,659

22. Derivative positions held on behalf of clients 273,225 455,240

The derivative positions held on behalf of clients are held in BinckBank’s own name but for the client’s account and at the client’s risk.

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23. Customer deposits 1,747,699 1,772,822

This item comprises:Savings accounts 861,239 624,774Demand deposits 886,460 1,148,048

1,747,699 1,772,822

24. Financial liabilities at amortised cost - 1,080

The profit-sharing bond loan concerns a loan granted by a group of employees. With the agreement of the bondholders, the entire loan was repaid in January 2008.

25. Provisions 93 416

This item comprises:Onerous contracts 93 146 Pensions - 270

93 416 (I) Onerous contracts The movements in the provision for onerous contracts were as follows:

Carrying amount as at 1 January 146 199 Released to income (53) (53)

Carrying amount as at 31 December 93 146

The provision for onerous contracts has been recognised in respect of rented office space, where the costs of the lease are higher than the economic benefits expected to be generated by the contract. The period for which the provision has been formed is equal to the remaining period of the lease, which expires on 1 October 2010, but will be reduced as and when the economic benefits are deemed likely to exceed the costs. The discount rate applied to this provision is equal to the expected future rate of increase in the rent.

(II) Pension liabilitiesThe changes in the pension provision were as follows:

Carrying amount as at 1 January 270 246 Added / (released) (26) 24 Released due to termination of plan (244) -

Carrying amount as at 31 December - 270

31 December 2008 31 December 2007x € 1,000 x € 1,000

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The following liabilities have been recognised in the consolidated balance sheet in respect of the defined benefit plan:

Pension liabilities:Present value of defined benefit obligation - 1,831 Fair value of plan assets - (1,585)Unattributed past service cost - 24

Total pension liabilities - 270

Movements in the present value of the defined benefit obligationOpening position 1,831 1,822 Current service cost 136 186 Interest cost 97 82 Employee contributions 55 50 Benefits paid (30) (17)Actuarial gains and losses 44 (292)Gain on termination of the plan (2,133) -

Closing position - 1,831

Movements in the fair value of plan assets:Opening position 1,585 1,576 Expected return on plan assets 78 64 Actuarial gains and losses on plan assets (348) (268)

Actual return on plan assets (270) (204)Contributions during the year – employer 181 180 Contributions during the year – employee 55 50 Benefits paid (30) (17)Adjustments on termination of plan (1,521) -

Closing position - 1,585

Net benefit expense:Current service cost 136 186 Interest cost 97 82 Expected return on plan assets (78) (64)Gain on termination of the plan (244) -

Total (89) 204

31 December 2008 31 December 2007x € 1,000 x € 1,000

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31 December 2008 31 December 2007x € 1,000 x € 1,000

The plan assets are managed by an insurance company. BinckBank is unable to influence the investment policy. None of the plan assets is held or used by BinckBank.

The actuarial assumptions used in measuring the above items were as follows:

Life expectancy AG generation table 2050, with age reduction of 1 year for men and 1 year for women

Discount rate 5.70%Expected return on plan assets 5.10%Expected pay rises 2.0%Retirement age 65 There are no other material actuarial assumptions. Indexation of the benefits is not discretionary.

The defined benefit pension scheme for Syntel employees was ended at year-end 2008, at which time final settlement took place and the accumulated benefit entitlements remained with the insurer. With effect from 1 January 2009, all Syntel staff have been transferred to the BinckBank N.V. defined contribution plan. This decision was taken and communicated to the pension scheme members before 31 December 2008. The effects have been accounted for in the 2008 financial year.

26. Other liabilities 48,069 31,454

This item comprises:Liabilities in respect of securities transactions not yet settled 36,538 13,904 Tax and social security contributions 1,748 2,034 Part of the purchase price for Syntel still payable - 3,750 Trade payables 5,761 9,818 Other liabilities 4,022 1,948

48,069 31,454

Part of the purchase price relating to the acquisition of the share capital of Syntel depended on Syntel’s gross margin over the years 2007 and 2008. Syntel’s performance in 2007 and the first three quarters of 2008 was sufficient to justify the settlement of the outstanding amount of the purchase price in the fourth quarter of 2008.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

27. Accruals and deferred income 23,350 22,152

This item comprises:Accrued interest 11,952 13,106 Staff costs 5,895 3,257 Stock exchange and clearing costs payable 898 1,343 Other accrued liabilities 4,605 4,446

23,350 22,152

Staff costs under this heading largely comprises staff profit sharing and bonuses payable.

28. Shareholders' equity 477,641 466,816

Issued share capital 7,709 7,709

A total of 77,093,508 ordinary shares were in issue, each with a nominal value of € 0.10. The share capital is fully paid up. On 14 December 2007, 46,256,105 shares were issued in connection with a 3-for-2 rights issue at a price of € 8.32 per share.

Number of shares as at 1 January 77,093,508 30,837,403Issue - 46,256,105

Number of shares as at 31 December 77,093,508 77,093,508

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

Share premium 392,395 392,395

The share premium is exempt from tax and in principle freely distributable.

Treasury shares (5,628) (487)

Number

Amount

Number

Amount

Carrying amount as at 1 January 129,137 (487) 253,145 (956)Issued to Management Board members and employees (67,477) 254 (19,508) 74 Exercise of options (34,073) 129 (100,000) 378 Reacquired from employees 1,275 (5) (4,500) 17 Acquired through treasury share repurchase programme 1,024,580 (5,519) - -

Carrying amount as at 31 December 1,053,442 (5,628) 129,137 (487)

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2008 2007x € 1,000 x € 1,000

As at 1 January 2008, the number of treasury shares held was 129,137, acquired at an average purchase price of € 3.78. In 2008, 101,550 treasury shares were issued. The issued shares were charged to other reserves at the average purchase price of € 3.78. In 2008, 1,024,580 shares were acquired through the treasury share repurchase programme at an average price of € 5.39 and 1,275 shares were acquired from an employee of Syntel who has left the company at a price of € 3.78. The carrying amount of the repurchased treasury shares as at year-end 2008 was measured at the average purchase price of € 5.34. The change in equity in respect of treasury shares reflects the amounts bought and sold. The quoted share price as at year-end 2008 was € 5.45 (2007: € 10.11).

On 7 May 2008, a total of 30,500 shares were granted to members of the Management Board and employees as a variable remuneration element in respect of performance in 2007. The expense was recognised in 2007. On the same date, 17,530 shares were granted to the Management Board and employees as part of the bonus share scheme forming part of the long-term remuneration package, the award of which was made in respect of the 2004 financial year. A change in remuneration policy resulted in the buy-out in 2008 of accrued entitlements to bonus shares as part of the long-term remuneration for the Management Board and employees in respect of the years 2005–2007, by the issue of 19,447 shares. The associated costs were recognised in the years 2004–2007.

Share options

As at 31 December 2008, there were no outstanding options to acquire shares of the company granted to members of the Management Board and/or employees (year-end 2007: 34,073 shares). In 2008, options were exercised for 34,073 shares at a price of € 2.30. In 2007, options were also exercised for 100,000 shares at a price of € 2.24. No options were granted in 2008 and 2007 and none expired.

Unappropriated profit 33,145 32,155

Carrying amount as at 1 January 32,155 24,009 Added to other reserves (32,155) (24,009)Profit for the year 33,145 32,155

Carrying amount as at 31 December 33,145 32,155

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2008 2007x € 1,000 x € 1,000

Fair value reserve 8,832 (1,342)

Carrying amount as at 1 January (1,342) (649)Unrealised gains on available-for-sale financial assets 19,252 - Unrealised losses on available-for-sale financial assets (4,857) (930)Realised gains and losses recognised through profit and loss (292) - Tax on unrealised gains and losses on available-for-sale financial assets (3,929) 237

Carrying amount as at 31 December 8,832 (1,342)

The reserve comprises the fair value gains and losses, after tax, on available-for-sale financial assets.

Other reserves 41,188 36,386

These comprise:(I) Foreign currency translation reserve 70 209 (II) Other reserves 41,118 36,177

41,188 36,386 (I) Foreign currency translation reserve

Carrying amount as at 1 January 209 334 Movement (139) (125)

Carrying amount as at 31 December 70 209

The foreign currency translation reserve comprises exchange differences arising on translation of the financial statements of non-eurozone subsidiaries.

(II) Other reserves

Carrying amount as at 1 January 36,177 24,612 Rights to shares granted 58 535 Issue of shares to Management Board and employees (254) (74)Proceeds from the sale of rights attaching to treasury shares - 422 Exercise of options (50) (154)Payment of final dividend (11,560) (8,874)Payment of interim dividend (15,413) (4,299)Shares reacquired from employees 5 - Appropriation of profit for previous year 32,155 24,009

Carrying amount as at 31 December 41,118 36,177

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Rights to sharesAs a result of the change in the remuneration policy, the ‘free’ shares granted as part of the long-term remuneration package were issued to the Management Board members on 7 May 2008. This led to the release of € 45,000 to income. A provision of € 103,000 was also made in 2008 in respect of rights to shares granted to Syntel staff.

Long-term bonus schemeA long-term bonus scheme has been in operation since 1 January 2008 under which the Management Board and a group of staff are granted rights to fictitious shares, depending on the position of BinckBank relative to the Total Shareholder Return reference group. This grant may lead to a future payment in cash, depending on BinckBank’s share price (cash settlement) on condition that the recipient remains an employee of BinckBank for three years following the grant. In 2008, 88,274 fictitious shares were granted to the Management Board and employees, in connection with which a reserve of € 892,000 was made and charged to income. The grant to the Management Board is made subject to the approval of the general meeting of shareholders to be held on 28 April 2009.

Bonus scheme for Syntel staffOn acquisition of Syntel, a bonus scheme was agreed with a group of Syntel employees. At the time of acceptance of this bonus arrangement, each employee opted to be paid either in BinckBank shares (equity settlement) or in cash at an amount based on the BinckBank share price (cash settlement). This bonus will be recognised as an expense provided the recipient remains an employee of Syntel for a period of four years, with 25% of the amount made available to each employee being released for each year in continued service. A total of 30,820 shares was issued to Syntel staff under the equity-settled programme on 29 December 2006. During the course of 2008, a total of 1,275 shares were reacquired following the departure of Syntel employees. As at 31 December 2008, the remaining shares issued to Syntel staff under the equity-settled programme totalled 29,545.

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2008 2007x € 1,000 x € 1,000

29. Interest 40,640 17,945

This includes all income and expense items relating to the lending and borrowing of money, providing they are of a similar nature to interest, as well as interest income on credit balances or interest expense on overdrafts.

This item comprises:

Interest incomeCash and balances with central banks 1,776 374 Financial assets at fair value through profit or loss 4,988 2,688 Available-for-sale financial assets 46,101 436 Held-to-maturity financial assets 587 893 Loans and receivables 41,895 23,577 Other interest income 153 102

95,500 28,070

Interest expenseInterest on customer deposits measured at amortised cost 52,497 9,781Interest on accounts with credit institutions 2,360 - Other interest expense 3 344

54,860 10,125

30. Commission 101,181 45,997

Commission comprises fees for services performed for and by third parties in respect of securities transactions and related services.

The item comprises:

Commission incomeTransaction income 129,024 63,765 Distribution fees 1,998 696 Custody fees 4,132 2,472 Other commission income 4,423 1,673

139,577 68,606 Commission expenseStock exchange charges and clearing costs 28,779 15,281 Commission sharing 7,056 6,428 Other commission expense 2,561 900

38,396 22,609

Notes to the consolidated income statement

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2008 2007x € 1,000 x € 1,000

31. Other income 6,162 5,504

This item comprises:Revenue from IT services 4,742 5,377 Subscriptions and course fees 1,420 127

6,162 5,504

Included under this heading are all gains and losses that cannot be accounted for under other items.

32. Result on investments 1,230 286

This item comprises:Financial assets held for trading 892 245 Financial assets at fair value through profit or loss 46 41 Available-for-sale financial assets 292 -

1,230 286

33. Impairment losses on financial instruments (205) (1,089)

This item comprises:Available-for-sale financial assets - - Loans and receivables (205) (1,089)Held-to-maturity financial assets - -

(205) (1,089)

34. Employee expenses 38,443 17,450

This item comprises:Salaries 23,810 10,635 Social security charges 3,039 1,341 Pension charges 1,637 845 Profit sharing and other bonuses 3,527 1,860 Other employee expenses 6,430 2,769

38,443 17,450

The research and development costs not capitalised by the subsidiary Syntel amounted to € 156,000 (2007: € 118,000).

Average number of employeesThe average number of employees in 2008, including members of the Management Board, was 520 (2007: 243). The number at year-end 2008 was 559 (year-end 2007: 481 including employees added with the acquisition of Alex).

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2008 2007x € 1,000 x € 1,000

Details of the remuneration paid to the individual members of the Management Board and Supervisory Board of BinckBank N.V. are disclosed in the remuneration section of the directors’ report (page 79). This information forms part of the consolidated financial statements.

35. Depreciation and amortisation 31,789 1,699

This item comprises amortisation and depreciation on:Intangible assets 29,653 955 Property, plant and equipment 2,232 929 Depreciation and amortisation attributed to discontinued operations (96) (185)

31,789 1,699

36. Other operating expenses 37,316 14,190

This item comprises:Marketing costs 10,561 5,109 ICT and outsourcing costs 10,106 3,303 Premises costs 3,793 1,868 Regulatory costs 682 200 Communication and information costs 6,043 1,812 Miscellaneous overheads 6,131 1,898

37,316 14,190 The miscellaneous overheads include costs associated with the integration of Binck and Alex.

37. Earnings per share (euros)

The basic earnings per ordinary share are calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

The calculation of the earnings per share is based on the following:

Profit on continuing operations (after tax) 33,039 30,599 Profit on discontinued operations (after tax) 106 1,556

Number of shares in issue on 1 January 77,093,508 30,837,403 Less: repurchased shares on 1 January (129,137) (253,145)

76,964,371 30,584,258

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2008 2007x € 1,000 x € 1,000

Weighted average number of shares relating to (*):Stock option shares issued to Management Board members and employees 43,895 18,007 Exercise of options 19,977 67,308 Shares reacquired from staff (318) - Shares acquired through treasury share repurchase programme (157,055)Share issue - 2,160,313

Average number of shares in issue 76,870,870 32,829,886

(*) for full details, see note 28. The above numbers are based on the total numbers disclosed in note 28, taking account of the date of reacquisition/exercise.

Earnings per share on continuing operations (euros) 0.43 0.93 Earnings per share on discontinued operations (euros) 0.00 0.05

0.43 0.98

38. Diluted earnings per share (euros)

The diluted earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period adjusted for possible dilution effects due to outstanding option rights, for example.

Average number of shares in issue 76,870,870 32,829,886 Number of options granted, but not yet exercised - 34,073 Average exercise price (euros) - 2.30 Average fair value (euros) - 10.71 Number of shares potentially issued at fair value - (7,317)

Number of shares used for calculation of diluted earnings per share 76,870,870 32,856,642

Diluted earnings per share on continuing operations (euros) 0.43 0.93 Diluted earnings per share on discontinued operations (euros) 0.00 0.05

0.43 0.98

No other transactions in ordinary shares or potential ordinary shares were conducted between the reporting date and the date of completion of these financial statements.

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2008 2007x € 1,000 x € 1,000

39. Paid and proposed dividend

Declared and paid during the yearDividend on ordinary shares:Final dividend for 2007: € 0.15 (2006: € 0.29) 11,560 8,874 Interim dividend for 2008: € 0.20 (2007: € 0.14) 15,413 4,299

26,973 13,173 The dividend for 2007 has been calculated on the new number of shares as at year-end 2007 (77,093,508). An interim dividend of € 0.06 was already made payable in 2007 (€ 0.14 on 30,837,403 shares).

Proposed for approval by the General Meeting of Shareholders (not recognised as a liability as at 31 December)Dividend on ordinary shares: 16,190 11,564 Final dividend for 2008: € 0.21 (2007: € 0.15)

40. Related party disclosures

The consolidated financial statements include the following BinckBank related parties:

Country Interest 2008 Interest 2007Accion N.V. (formerly: Binck Securities B.V.) Netherlands 39% 100%Syntel Beheer B.V. Netherlands 100% 100%

Syntel B.V. Netherlands 100% 100%Fintegration B.V. Netherlands 100% 100%

Florint B.V. Netherlands 35% 35%Bewaarbedrijf BinckBank B.V. Netherlands 100% 100%Stichting Effectengiro Binck Netherlands 100% 100%Binck België N.V. Belgium 100% 100%Hills Independent Traders Ltd. United Kingdom 100% 100%

The activities of Hills Independent Traders Ltd. were sold off in 2006. The company is in the process of liquidation. Florint B.V., incorporated on 1 October 2007, is the continuation on an independent footing of the Binck Securities B.V. bond trading operations (see note 7). In 2008, the share trading operations were demerged by means of a management buyout and are being continued under the name of Accion N.V.

The group of related parties includes associates where there is significant influence and the members of the BinckBank Management Board and Supervisory Board.

Terms and conditions of transactions with related partiesTransactions with related parties are conducted on commercial terms and conditions and at market prices. As at year-end 2008, BinckBank did not recognise any bad debt provisions for receivables from related parties (2007: nil). The judgement concerning the need for such provisions is made each year on the basis of an assessment of the financial position of the individual related parties and the markets in which they operate.

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No transactions involving the Management Board or the Supervisory Board other than under contracts of employment took place during the year. For other relations with the Management Board, reference is made to the remuneration report in the Management Board’s report page 79.

The investment portfolio of fixed-income securities is held in a separate entity, Binck VOF, jointly controlled by BinckBank N.V. and Binck België N.V. The company has a contract with Florint B.V. for the management of part of the investment portfolio of fixed-income securities. Performance is assessed against an agreed benchmark. The management fee is made up of a fixed amount and a variable amount calculated at going rates. The execution of some fixed-income securities orders has also been subcontracted to Florint B.V. Fees totalling € 1,209,000 were paid to Florint B.V. in 2008. The amount still to be settled as at year-end 2008 was € 672,000.

In 2008, the share trading operations of Binck Securities B.V. were demerged by means of a management buyout. BinckBank N.V. has retained an interest in 39% in the company, which now goes by the name of Accion B.V. A loan of € 1,200,000 with a maturity of four years and an interest rate of 8% was also granted to Accion B.V. No collateral has yet been furnished for this loan. Interest totalling € 48,000 was charged in 2008. Accrued interest as at year-end 2008 amounted to € 48,000.

41. Liabilities not shown on the face of the balance sheet2008 2007

Contingent liabilitiesLiabilities in respect of contracts of suretyship and guarantees 3,086 2,423 Liabilities in respect of irrevocable facilities - -

To meet the requirements of its clients, BinckBank offers products such as contracts of suretyship and guarantees in relation to loans. The underlying value of these products is not presented on the face of the balance sheet. The above figure represents the maximum potential credit risk for BinckBank attaching to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

On 22 December 1995, Bank Labouchere N.V., a former owner of Alex, and VEB concluded an agreement concerning the provision of brokerage services to VEB members. The agreement was amended on 28 March 2003, substituting Rabobank for Bank Labouchere N.V. The agreement was most recently amended as regards the following aspects: (I) the product VEB Bottom-Line was changed to Alex Bottom-Line, (II) the range of products offered was extended, (III) the services would henceforward be provided for a profitable fee instead of at cost and (IV) BinckBank would assume Rabobank’s responsibilities under the contract following the acquisition of Alex.

If BinckBank terminates the amended VEB agreement, it will be liable to pay an amount equal to the custody fee and dividend commission paid by each client of Alex Bottom-Line on entry into the agreement plus the amount of any custody fee and dividend commission additionally paid by each client on exceeding set limits.

Lease commitmentsThe company has leases on office premises in the Netherlands, Belgium, France and Spain. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years. The combined expense relating to office rents and operating lease payments for the vehicles in 2008 was approximately € 3.1 million (2007: € 2.1 million).

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The aged analysis of the outstanding liabilities is as follows:

Less than one year 3,689One to five years 4,881Longer than five years 1,094

LawsuitsBinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the Management Board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or profitability.

Collective Guarantee SchemeThe Financial Supervision Act (WFT) came into operation on 1 January 2007. One of the things provided by the act is the deposit guarantee system, replacing the Collective Guarantee Scheme. The act also introduced the investors compensation system, which replaces the previous Investors Compensation Scheme. Under the deposit guarantee system, the first € 20,000 which a customer has in a current account or a savings account is fully guaranteed and the next € 20,000 is 90% guaranteed. The investors compensation system provides for a refund of up to a maximum of € 20,000 per account holder. If a credit institution finds itself in difficulties and does not have sufficient funds to pay all or part of the guaranteed amounts to its account holders, the Nederlandsche Bank will make up the difference. The total amount paid out by the central bank will then be recovered from the banks on a pro rata basis. On 7 October 2008, the Minister of Finance decided to increase the cover under the deposit guarantee system for the deposits of account holders in the Netherlands to € 100,000 per person per bank for a period of one year. During this period, the deposit guarantee system guarantees an amount of up to € 100,000 per person per institution (regardless of the number of accounts). In the case of joint accounts, both account holders may claim compensation under the deposit guarantee system, with a joint balance of up to € 200,000 in that case being fully covered.

42. Post-balance-sheet events

In February 2009, agreement was reached on the disposal of the remaining interest in Florint B.V. to the other shareholders. This transaction will be effected at the fair value of the interest as at 31 December 2008.

43. Segment information

A segment is a part of BinckBank that either supplies specific products or services (i.e. a business segment) or supplies products or services in a specific economic area (i.e. a geographical segment) and is exposed to different risks and generates different revenues from other segments. The primary segmentation is based on activity and the following business segments are identified: Retail and Professional Services. The Retail business unit is a broker for private clients (mainly online brokerage). The Professional Services business unit provides professional services in securities and derivatives transactions for professional investors in the Netherlands and other countries, including much of the administrative effort. The secondary segmentation is geographical, with a distinction being made between the operations in the Netherlands and those in other countries. Syntel charged BinckBank € 4,690,000 in connection with services rendered. These costs have been eliminated in the segment information presented below.

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Business segmentation (x € 1,000)

Continuing operations Discontinued operations

Total

Note Retail Professional services Total2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Interest income 86,808 21,290 8,692 6,780 95,500 28,070 (286) 441 95,214 28,511

Interest expense (49,621) (5,626) (5,239) (4,499) (54,860) (10,125) 19 (475) (54,841) (10,600)

Net interest income 29 37,187 15,664 3,453 2,281 40,640 17,945 (267) (34) 40,373 17,911

Commission income 122,653 52,721 16,924 15,885 139,577 68,606 - - 139,555 68,606

Commission expense (29,672) (14,259) (8,724) (8,350) (38,396) (22,609) - - (38,374) (22,609)

Net commission income 30 92,981 38,462 8,200 7,535 101,181 45,997 - - 101,181 45,997

Other income 31 960 - 5,202 5,504 6,162 5,504 - - 6,162 5,504

Investment results 32 933 286 297 - 1,230 286 3,139 11,148 4,369 11,434

Impairment losses (reversals) on financial instruments

(205 (1.089) - - (205)

(1.089) - - (205) (1.089)

Total income from operating activities 131,856 53,323 17,152 15,320 149,008 68,643 2,872 11,114 151,880 79,757

Employee expenses 34 (30,992) (9,360) (7,451) (8,090) (38,443) (17,450) (1,475) (7,094) (39,918) (24,544)

Depreciation and amortisation 35 (31,157) (966) (632) (733) (31,789) (1,699) (96) (185) (31,885) (1,884)

Other operating expenses 36 (34,686) (12,434) (2,630) (1,756) (37,316) (14,190) (1,159) (1,746) (38,475) (15,936)

Total operating activities (96,835) (22,760) (10,713) (10,579) (107,548) (33,339) (2,730) (9,025) (110,278) (42,364)

Result from operations 35,021 30,563 6,439 4,741 41,460 35,304 142 2,089 41,602 37,393

Share in profits of associates 15 520 80 - - 520 80

Result before tax 41,980 35,384 142 2,089 42,122 37,473

Tax 18 (8,941) (4,785) (36) (533) (8,977) (5,318)

Result after tax 33,039 30,599 106 1,556 33,145 32,155

Carrying amount of assets 2,355,483 2,473,285 222,911 271,110 2,578,394 2,744,395 - 12,031 2,578,394 2,756,426

Liabilities 1,901,643 2,047,105 199,110 236,358 2,100,753 2,283,463 - 6,147 2,100,753 2,289,610

Investments assets 3,193 3,285 3,563 3,003 6,756 6,288 - 621 6,756 6,909

Geographical segmentation (x € 1,000)

Netherlands Other countries Total2008 2007 2008 2007 2008 2007

Total income from operating activities 145,013 63,739 3,995 4,904 149,008 68,643

Carrying amount of assets 2,191,231 2,372,269 387,163 372,126 2,578,394 2,744,395

Investment assets 6,599 6,111 157 177 6,756 6,288

Depreciation and amortisation 31,686 1,624 103 75 31,789 1,699

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44. Financial risks

In the conduct of its operations BinckBank faces a variety of risks. BinckBank aims to minimise the risk profile so that the impact of unexpected events on both profits and equity is limited. BinckBank devotes considerable attention to risk management and employs risk management systems. Adequate control measures, reporting systems and information systems incorporating limits are part of the risk management process. The identification of risks and the creation and updating of appropriate control measures constitute an ongoing process within BinckBank. The section on risk management under the notes on Basel II and Pillar III on page 32 of the directors’ report describes the risks and control measures relevant to BinckBank.

Credit riskCredit risk is the risk that a party trading a financial instrument and/or the issuer of the instrument will fail to discharge an obligation relating to the instrument and consequently cause BinckBank to incur a financial loss. This credit risk is relevant to the items in the balance sheet included under the headings of banks, financial assets (including lending against securities) and other assets. With respect to these balance sheet items, the main concern is the credit rating of the counterparty (except in the case of lending against securities, since these loans are fully covered by the securities furnished as collateral).

Maximum credit riskThe table below presents the maximum credit risk associated with the various financial instruments. The maximum credit risk is shown gross, without taking account of the effects of credit risk mitigation provided by set-off agreements and the collateral that has been furnished.

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2008 2007x € 1,000 x € 1,000

Credit RiskCash and balances with central banks 39,289 9,522 Due from Banks 244,412 422,028 Financial assets held for trading - 63 Financial assets designated at fair value through the income statement 37,033 268,617 Available-for-sale financial assets 1,298,233 8,117 Loans and receivables 227,725 497,762 Held-to-maturity investments 12,558 623,498 Associates 1,200 -Other assets 9,311 7,689 Prepayments and accrued income 35,774 23,659

1,905,535 1,860,955 Contingent liabilities 3,086 2,423

1,908,621 1,863,378

The tables below present the quality of the loans and advances and the provision for bad debts.Not yet due 227,168 497,207 Overdue but not provided for 557 555 Provided for 477 1,105

Total 228,202 498,867 Bad debt provision (477) (1,105)

Net loans and receivables 227,725 497,762 The analysis of loans and receivables according to the percentage covered by the value of the collateral is as follows:< 25% of the value of the collateral 37,596 Between 25% and 50% of the value of the collateral 97,559 Between 50% and 75% of the value of the collateral 88,601 > 75% of the value of the collateral 4,446 Specific bad debt provision (477)

227,725

There are no items in arrears or for which provisions have been recognised in any of the other categories of financial assets.

Loans and receivables under renewed contracts 173 77

In the case of existing loans and receivables, it is possible for renewed contracts to be concluded with clients. Such assets are no longer treated as overdue or bad debts. The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable.

Loans and receivables under renewed contracts 173 77

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Sector concentration riskThe following table presents the credit risk, analysed by sector.

2008 Financial institutions

Government bonds/

Government

Private individuals

Other private

sector

Total

guaranteed bonds

Cash and balances at central banks - 39,289 - - 39,289 Banks 244,412 - - - 244,412 Financial assets held for trading - - - - - Financial assets at fair value through profit or loss 37,033 - - - 37,033 Available-for-sale financial assets 645,652 652,581 - - 1,298,233 Loans and receivables - - 227,725 - 227,725 Held-to-maturity investments - 12,558 - - 12,558 Investments in associates - - - 1,200 1,200 Current tax assets - 4,623 - - 4,623 Deferred tax assets - 5,980 - - 5,980 Other assets - - - 9,311 9,311 Prepayments and accrued income 15,675 11,151 3,718 5,230 35,774

942,772 726,182 231,443 15,741 1,916,138 Contingent liabilities - - 2,521 565 3,086

942,772 726,182 233,964 16,306 1,919,224

2007 Financial institutions

Government bonds/

Government

Private individuals

Other private

sector

Total

guaranteed bonds

Cash and balances at central banks - 9,522 - - 9,522 Banks 422,028 - - - 422,028 Financial assets held for trading - - - 63 63 Financial assets at fair value through profit or loss 144,629 123,988 - - 268,617 Available-for-sale financial assets 8,117 - - - 8,117 Loans and receivables - 5,000 492,762 - 497,762 Held-to-maturity investments 7,025 616,473 - - 623,498 Investments in associates - - - - - Current tax assets - 7,396 - - 7,396 Deferred tax assets - 6,843 - - 6,843 Other assets - - - 7,689 7,689 Prepayments and accrued income 3,676 1,988 11,409 6,586 23,659

585,475 771,210 504,171 14,338 1,875,194Contingent liabilities - - 2,423 - 2,423

585,475 771,210 506,594 14,338 1,877,617

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Credit rating of interest-bearing securitiesAssessment of the creditworthiness of the investments in securities is based on credit ratings provided by rating agencies.

The following table analyses the interest-bearing securities based on their Fitch rating or equivalent.

Market riskThe only market risk to which BinckBank is exposed is currency risk. This is the risk of fluctuations in the value of items denominated in foreign currencies due to exchange rate movements. BinckBank does not assume active trading positions. Currency positions arising in the course of operations are normally hedged on the day on which they become

known. The way in which the system currently operates within BinckBank N.V. means that currency positions resulting from client transactions are not shown until one working day later. The currency risk on these positions during this delay of one working day is regarded as an acceptable business risk. Finally, the translation risk on investments is not normally hedged.

2008 AAA AA AA - A+ A A - Total

Financial assets at fair value through profit or loss 37,033 - - - - - 37,033 Available-for-sale financial assets 1,154,808 21,781 66,343 51,479 1,822 2,000 1,298,233 Held-to-maturity investments 12,558 - - - - - 12,558

Total 1,204,399 21,781 66,343 51,479 1,822 2,000 1,347,824

2007 AAA AA AA - A+ A A - Total

Financial assets at fair value through profit or loss 258,631 - 9,986 - - - 268,617 Available-for-sale financial assets - - - - 4,934 3,183 8,117 Held-to-maturity investments

616,473 - - - 7,025 - 623,498

Total 875,104 - 9,986 - 11,959 3,183 900,232

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Interest rate riskInterest rate risk refers to the exposure to movements in the yield curve affecting future profitability. BinckBank manages this risk in relation to its banking operations by actively matching the maturities of its assets and liabilities within certain limits.

BinckBank has an investment portfolio made up of fixed-income securities (both held-to-maturity investments and available-for-sale investments). The actual investments in the portfolio are selected

by the Management Board. The portfolio is susceptible to gains and losses due to movements in the yield curve and the creditworthiness of the institutions issuing the bonds. BinckBank invests chiefly in bonds issued by central governments, central banks, regional governments where the loans are central government-guaranteed and credit institutions.

The following tables present BinckBank’s interest rate mix:

2008x € 1,000

< 1 month > 1 month< 1 year

> 1 year< 2 years

> 2 years< 5 years

> 5 years Total

AssetsCash and balances with central banks 39.283 - - - - 39.283 Banks 244.412 - - - - 244.412 Financial assets held for trading - - - - - - Financial assets at fair value through profit or loss - - 37.033 - - 37.033 Available-for-sale financial assets 50.370 546.716 485.027 212.297 3.823 1.298.233 Loans and receivables 227.725 - - - - 227.725 Held-to-maturity investments - 4.080 4.228 4.250 - 12.558 Investments in associates - - - 1.200 - 1.200

Total assets 561.790 550.796 526.288 217.747 3.823 1.860.444

LiabilitiesCustomer deposits 1.747.699 - - - - 1.747.699 Financial liabilities measured at amortised cost - - - - - -

Total liabilities 1.747.699 - - - - 1.747.699

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An increase in interest rates of one percentage point would have the effect of reducing the profit and equity by € 18.3 million. A decrease in interest rates of one percentage point would produce an increase of € 18.3 million. None of the other items in a balance sheet presented in accordance with IFRS would be materially affected.

The effective interest rate on the portfolio of fixed-income investments classified as available for sale is 4.6%. The effective interest rate on loans and receivables is 6.0% and 4.0% on held to maturity assets.

Liquidity riskThe liquidity risk is the risk that cash and investments will not be available (or will not be

available in sufficient quantities) for BinckBank to meet its obligations in the short term.

The matching or otherwise of maturities of assets and liabilities is of fundamental importance to BinckBank. It is unusual for banks to achieve complete maturity matching of assets and liabilities because transactions are frequently not predictable and are also extremely diverse in nature. The maturities of assets and liabilities and the scope for replacing interest-bearing liabilities as and when they mature in an economically acceptable manner are important factors in the assessment of the bank’s liquidity and the extent to which the bank is exposed to movements in interest rates and exchange rates.

2007x € 1,000

< 1 month > 1 month< 1 year

> 1 year< 2 years

> 2 years< 5 years

> 5 years Total

AssetsCash and balances with central banks 9,516 - - - - 9,516 Banks 422,028 - - - - 422,028 Financial assets held for trading - - - - - - Financial assets at fair value through profit or loss 34,093 105,001 64,159 65,365 - 268,618 Available-for-sale financial assets - - - - 8,117 8,117 Loans and receivables 492,762 5,000 - - - 497,762 Held-to-maturity investments 599,598 11,179 4,101 8,620 - 623,498

Total assets 1,557,997 121,180 68,260 73,985 8,117 1,829,539

LiabilitiesCustomer deposits 1,772,822 - - - - 1,772,822 Financial liabilities measured at amortised cost - 1,080 - - - 1,080

Total liabilities 1,772,822 1,080 - - - 1,773,902

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The following table presents the maturity calendar of the assets and liabilities as at balance sheet date. Classed as being available on demand are those securities which can be traded on an active market. Also treated as being available on demand

are assets maturing within two weeks. Depending on the liquidity in the market the value of the financial assets that can be claimed immediately can differentiate from book value.

Maturity calendaras at 31 December 2008

On demand

< 3 months > 3 months< 1 year

> 1 year< 5 years

> 5 years Total

Cash and balances with central banks 39,289 - - - - 39,289 Banks 179,412 65,000 - - - 244,412 Financial assets held for trading - - - - - - Financial assets at fair value through profit or loss 37,033 - - - - 37,033 Available-for-sale financial assets 1,298,233 - - - - 1,298,233 Loans and receivables 227,725 - - - - 227,725 Held-to-maturity financial assets - - 4,080 8,478 - 12,558 Investments in associates - - - 1,200 - 1,200Current tax assets 4,623 - - - - 4,623 Deferred tax assets - - 2,148 3,832 - 5,980 Other assets - 9,311 - - - 9,311 Prepayments and accrued income 35,774 - - - - 35,774

Total assets 1,822,089 74,311 6,228 13,510 - 1,916,138

Customer deposits 1,747,699 - - - - 1,747,699 Financial liabilities at amortised cost - - - - - - Current tax liabilities - - - - - - Deferred tax liabilities - - 3,031 1,413 3,672 8,116 Other liabilities 48,069 - - - - 48,069 Accruals and deferred income 23,350 - - - - 23,350

Total liabilities 1,819,118 - 3,031 1,413 3,672 1,827,234

Liquidity surplus/(deficit) 2,971 74,311 3,197 12,097 (3,672) 88,904

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Derivative positions held on behalf of clients (note 22)The cash flows in respect of premiums received and paid relating to derivative positions held on behalf of clients have already been accounted for in the

financial statements. Exercise of contracts giving rise to positions assumed by clients can lead to future cash flows which BinckBank is unable to predict.

Maturity calendaras at 31 December 2007

On demand

< 3 months > 3 months< 1 year

> 1 year< 5 years

> 5 years Total

Cash and balances with central banks 9,522 - - - - 9,522 Banks 422,028 - - - - 422,028 Financial assets held for trading 63 - - - - 63 Financial assets at fair value through profit or loss 268,617 - - - - 268,617 Available-for-sale financial assets 8,117 - - - - 8,117 Loans and receivables 492,762 - 5,000 - - 497,762 Held-to-maturity financial assets 599,599 - 11,178 12,721 - 623,498 Current tax assets 7,396 - - - - 7,396 Deferred tax assets - 347 1,041 5,455 - 6,843 Other assets 100 7,589 - - - 7,689 Prepayments and accrued income 23,659 - - - - 23,659

Total assets 1,831,863 7,936 17,219 18,176 - 1,875,194

Customer deposits 1,772,822 - - - - 1,772,822 Financial liabilities at amortised cost 1,080 - - - - 1,080 Current tax liabilities 217 - - - - 217 Deferred tax liabilities 82 - - - - 82 Other liabilities 31,454 - - - - 31,454 Accruals and deferred income 22,152 - - - - 22,152 Outtrade rekeningen - - - - - -

Total liabilities 1,827,807 - - - - 1,827,807

Liquidity surplus/(deficit) 4,056 7,936 17,219 18,176 - 47,387

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45. Fair value financial instruments

Fair valueThe following analysis compares the carrying amounts and fair values of all the financial instruments recognised in BinckBank’s financial statements, including assets and liabilities classified as available for sale.

Carrying amount Fair value2008 2007 2008 2007

Financial assetsCash and balances with central banks 39,289 9,522 39,289 9,522 Banks 244,412 422,028 244,412 422,028 Financial assets held for trading - 63 - 63 Financial assets at fair value through profit or loss 37,033 268,617 37,033 268,617 Available-for-sale financial assets 1,298,233 8,117 1,298,233 8,117 Loans and receivables 227,725 497,762 227,725 497,762 Held-to-maturity financial assets 12,558 623,498 12,354 623,150 Other assets 9,311 7,689 9,311 7,689 Prepayments and accrued income 35,774 23,659 35,774 23,659 Derivative positions held on behalf of clients 273,225 455,240 273,225 455,240

Total 2,177,560 2,316,195 2,177,356 2,315,847

Financial liabilitiesCustomer deposits 1,747,699 1,772,822 1,747,699 1,772,822 Liabilities in the form of securities - 1,080 - 1,080 Other liabilities 48,069 31,454 48,069 31,454 Accruals and deferred income 23,350 22,152 23,350 22,152 Derivative positions held on behalf of clients 273,225 455,240 273,225 455,240

Total 2,092,343 2,282,748 2,092,343 2,282,748

The fair value of the interest-bearing securities included in the financial assets is measured on the basis of bid prices in active markets. The available-for-sale financial assets include securities on which there are unrealised losses of € 4.9 million. At this stage, however, there are no indications of impairment.

The fair value of loans and receivables is determined by calculating the present value of the expected future cash flows at the prevailing interest rates. The fair value of the loans and other financial assets is calculated by applying market interest rates.

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Note 31 December 2008 31 December 2007x € 1,000 x € 1,000

Assets

Cash and balances with central banks c 39,285 9,522Bank d 239,598 411,062Financial assets held for trading e - 51Financial assets at fair value through profit or loss f 29,785 219,030Available-for-sale financial assets g 1,045,115 8,117Loans and receivables h 227,725 497,762Held-to-maturity financial assets i 12,558 623,498Investments in subsidiaries and associates j 285,236 72,833Intangible assets k 377,347 405,795Property, plant and equipment l 8,641 6,020Current tax assets m 4,372 7,097Deferred tax assets n 1,290 -Other assets o 8,189 8,506Prepayments and accrued income p 30,962 22,442Derivative positions held on behalf of clients 22 273,225 455,240

Total assets 2,583,328 2,746,975

Equity and liabilities

Customer deposits q 1,747,699 1,772,822Financial liabilities measured at amortised cost r - 1,080Provisions s 93 146Deferred tax liabilities n 6,923 -Other liabilities t 54,995 29,765Accruals and deferred income u 22,752 21,106Derivative positions held on behalf of clients 22 273,225 455,240

Total liabilities 2,105,687 2,280,159

Issued share capital 7,709 7,709Share premium 392,395 392,395Reserve fair value 6,616 (1,342)Other reserves and retained earnings 43,404 36,386Treasury shares (5,628) (487)Unappropriated profit 33,145 32,155

Shareholders’ equity v 477,641 466,816

Totaal equity and liabilities 2,583,328 2,746,975

Company balance sheet(before appropriation of profit)

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2008 2007x € 1,000 x € 1,000

Company income statement

Share in result of subsidiaries and associates (after tax) 13,558 9,544 Other results (after tax) 19,587 22,611

Profit for the year 33,145 32,155

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Company statement of changes in equity(amounts in € x 1,000)

Note Issued share

capital

Share premium

Treasury shares

Fair value reserve

Unapprop-riatedprofit

Other reserves

Total equity

1 January 2008 7,709 392,395 (487) (1,342) 32,155 36,386 466,816

Unrealised gain on available-for-sale assets - - - 8,189 - - 8,189Realised gains and losses in profit and loss - - - (231) - - (231)Unrealised loss on available-for-sale financial assets of subsidiaries and associates (after tax) j - - - - - 2,216 2,216Gains and losses on exchange 28 - - - - - (139) (139)

Results recognised directly in equity - - - 7,958 - 2,077 10,035

Net profit for the year - - - - 33,145 - 33,145

Total income and expense - - - 7,958 33,145 2,077 43,180

Payment of final dividend 39 - - - - - (11,560) (11,560)Payment of interim dividend 39 - - - - - (15,413) (15,413)

Grant of rights to shares 28 - - - - - 58 58

Payment of stock option shares 28 - - 115 - - (115) -Payment of bonus shares 28 - - 139 - - (139) -Exercise of options 28 - - 129 - - (50) 79Shares reacquired from employees - - (5) - - 5 -Buy-back of own shares - - (5,519) - - - (5,519)

Transfer of retained earnings to other reserves - - - - (32,155) 32,155 -

31 December 2008 7,709 392,395 (5,628) 6,616 33,145 43,404 477,641

The consolidated fair value reserve includes the fair value adjustment on available-for-sale financial assets of subsidiaries and associates.

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Note Issued share

capital

Share premium

Treasury shares

Fair value reserve

Unapprop-riatedprofit

Other reserves

Total equity

1 January 2007 3,084 20,855 (956) (649) 24,009 24,946 71,289

Unrealised loss of available-for-sale assets (after tax) - - - (693) - - (693)Gains and losses on exchange 28 - - - - - (125) (125)

Results recognised directly in equity - - - (693) - (125) (818)

Net profit for the year - - - - 32,155 - 32,155

Total income and expense - - - (693) 32,155 (125) 31,337

Payment of final dividend 39 - - - - - (8,874) (8,874)Payment of interim dividend 39 - - - - - (4,299) (4,299)

Grant of rights to shares 28 - - - - - 535 535

Payment of stock option shares 28 - - 74 - - (74) -Payment of bonus shares 28 - - 17 - - - 17Exercise of options 28 - - 378 - - (154) 224Issue of shares 4,625 380,225 384,850Cost of share issue - (8,685) - - - - (8,685)

Proceeds ofrom sales of right attaching to treasury shares - - - - - 422 422

Transfer of retained earnings to other reserves - - - - (24,009) 24,009 -

31 december 2007 7,709 392,395 (487) (1,342) 32,155 36,386 466,816

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Notes to the company financial statements

a. General

Company informationBinckBank N.V. is a company established in the Netherlands with its domicile in Amsterdam, whose shares are publicly traded. BinckBank N.V. provides conventional and internet broking services in securities and derivative transactions for private and professional investors. The subsidiary Syntel Beheer B.V. specialises in developing software for financial institutions for processing and keeping account of securities transactions. In the following pages, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and its various subsidiaries.

BinckBank’s company financial statements for the year ended 31 December 2008 have been prepared by the company’s Management Board and approved for publication pursuant to a formal decision taken by the Management Board and the Supervisory Board on 6 March 2009. The financial statements for 2008 will be adopted at the General Meeting of Shareholders to be held on 28 April 2009.

Management Board: Supervisory Board:T.C.V. Schaap C.J.M. Scholtes P. Aartsen J.K. BrouwerN. Bortot L. DeuzemanE.J.M. Kooistra A.M. van Westerloo

Presentation of the financial statementsUtilising the option provided by Part 9 of Book 2 of the Netherlands Civil Code, BinckBank has prepared its company financial statements using the same accounting policies as those used for the consolidated financial statements. In accordance with the provisions of Article 2:402 of the Netherlands Civil Code, the company income statement shows only the share in results of subsidiaries and associates after tax and other profits after tax.

b. Accounting policies

GeneralDetails of the accounting policies can be found in the notes to the consolidated financial statements and, unless otherwise stated, apply equally to the company financial statements.

Investments in subsidiaries and associatesThe investments in group companies are recognised at net asset value. The reporting dates of these companies are the same and the accounting policies applied to their financial reporting are in accordance with those applied by BinckBank for similar transactions and events in similar circumstances.

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Notes to the company balance sheet

c. Cash and balances with central banks 39,285 9,522

This item includes all cash in legal tender, including bank notes and coins in foreign currency, and any credit balances available on demand from the central banks in countries where Binckbank has offices.

d. Banks 239,598 411,062

This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises:Credit balances available on demand 234,598 381,059 Call money 5,000 30,003

239,598 411,062

The call money receivables have original maturities of less then three months. Interest is received on these balances at a variable rate based on EONIA or EURIBOR.

e. Financial assets held for trading - 51

This item comprises:Derivatives trading portfolio 51

- 51

f. Financial assets at fair value through profit and loss 29,785 219,030

This item comprises:- Government bonds/Government-guaranteed bonds - 101,100 - Other bonds 29,785 117,930

29,785 219,030

The portfolio of interest-bearing securities which is carried at fair value with gains and losses recognised in the income statement concerns an actively managed portfolio of bonds with individual maturities ranging from 0 to 3 years. The fair value of the portfolio is measured on a daily basis as part of the performance assessment and in connection with portfolio risk management.

31 December 2008 31 December 2007x € 1,000 x € 1,000

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31 December 2008 31 December 2007x € 1,000 x € 1,000

g. Available-for-sale financial assets 1,045,115 8,117

This item comprises:- Government bonds/government-guaranteed bonds 529,415 -- Other bonds 515,700 8,117

1,045,115 8,117

Movements in available-for-sale financial assets were:Carrying amount as at 1 January 8,117 9,047 Purchases 2,082,927 - Sales (1,030,530) - Redemptions (20,569) - Revalidation gains and losses 5,170 (930)

Carrying amount as at 31 December 1,045,115 8,117

h. Loans and receivables 227,725 497,762

This item comprises receivables from private sector clients, including overnight loans and overdrafts that are collateralised by securities and bank guarantees (lending against securities)

The analysis is as follows:Public sector loan - 5,000 Receivables collateralised by securities 225,028 490,560 Receivables collateralised by bank guarantees 2,140 2,144 Other receivables 1,034 1,163

Loans and receivables, gross 228,202 498,867 Less: impairment provision (477) (1,105)

Loans and receivables, net 227,725 497,762

The interest rate on the receivables under this heading is based on EURIBOR or EONIA. Other receivables refers to remaining amounts receivable after execution of collateral (securities and bank guarantees).

i. Held-to-maturity financial assets 12,558 623,498

This item comprises:- Government bonds 12,558 16,875 - Private loans to credit institutions - 7,025 - Commercial paper (government-guaranteed) - 599,598

12,558 623,498

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j. Investments in subsidiaries and associates 285,236 72,833

Movements during the year were as follows:Carrying amount as at 1 January 72,833 22,639 Capital increases and acquisitions 204,004 50,525 Disposals and dissolutions (1,627) - Dividends and capital refunds (5,609) (9,750)Results for the year 13,558 9,544 Movement in revaluation reserve for associates 2,216 - Exchange differences and other movements (139) (125)

Carrying amount as at 31 December 285,236 72,833

This item includes a loan of € 1,200,000 granted to Accion N.V. for a period of four years at an interest rate of 8%. No collateral has been furnished for this loan.

31 December 2008 31 December 2007x € 1,000 x € 1,000

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2008 2007x € 1,000 x € 1,000

k. Intangible assets 377,347 405,795

The movements in 2008 were as follows:

Brand Customer deposits

Customer base

Software Goodwill Total

Carrying amount as at 1 January 2008 31,405 84,095 131,058 6,308 152,929 405,795

Investments - - - 1,369 - 1,369Disposals - cost - - - (1,723) - (1,723)Disposals - cumulative amortisation - - - 1,723 - 1,723Amortisation (6,281) (8,410) (13,105) (1,416) - (29,212)Reclassification - - - (605) - (605)

Carrying amount as at 31 December 2008 25,124 75,685 117,953 5,656 152,929 377,347

Cost 31,405 84,095 131,058 9,311 152,929 408,798Cumulative amortisation and impairment (6,281) (8,410) (13,105) (3,655) - (31,451)

Carrying amount as at 31 December 2008 25,124 75,685 117,953 5,656 152,929 377,347

Amortisation period (years) 5 10 5-10 5

The movements in 2007 were as follows:

Brand Customer deposits

Customer base

Software Goodwill Total

Carrying amount as at 1 January 2007 - - - 1,260 8,881 10,141

Investments - - - 2,362 1,166 3,528Acquisition of Alex 31,405 84,095 131,058 3,251 142,882 392,691Amortisation - - - (565) - (565)

Carrying amount as at 31 December 2007 31,405 84,095 131,058 6,308 152,929 405,795

Cost 31,405 84,095 131,058 9,517 152,929 409,004Cumulative amortisation and impairment - - - (3,209) - (3,209)

Carrying amount as at 31 December 2007 31,405 84,095 131,058 6,308 152,929 405,795

Amortisation period (years) 5 10 5-10 5

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2008 2007x € 1,000 x € 1,000

l. Property, plant and equipment 8,641 6,020

The movements in 2008 were as follows:

Fixtures and equipment

Computer hardware

Other Total

Carrying amount as at 1 January 2008 1,064 4,943 13 6,020 Additions 217 4,595 - 4,812 Disposals - cost (4,857) (2,852) - (7,709)Disposals - cumulative depreciation 4,857 2,852 - 7,709 Depreciation (416) (1,643) (3) (2,062)Reclassification (186) 57 - (129)

Carrying amount as at 31 December 2008 679 7,952 10 8,641

Cost 989 11,797 18 12,804

Cumulative depreciation and impairment (310) (3,845) (8) (4,163)

Carrying amount as at 31 December 2008 679 7,952 10 8,641

Depreciation period in years 5 - 10 5 5

The movements in 2007 were as follows:

Fixtures and equipment

Computer hardware

Other Total

Carrying amount as at 1 January 2007 502 1,709 17 2,228 Additions 401 2,040 - 2,441 Acquisition of Alex 373 1,764 - 2,137 Depreciation (212) (570) (4) (786)

Carrying amount as at 31 December 2007 1,064 4,943 13 6,020

Cost 5,494 8,104 18 13,616

Cumulative depreciation and impairment (4,430) (3,161) (5) (7,596)

Carrying amount as at 31 December 2007 1,064 4,943 13 6,020

Depreciation period in years 5 - 10 5 5

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31 December 2008 31 December 2007x € 1,000 x € 1,000

m. Current tax assets 4,372 7,097

These concern corporation tax credits. In 2008, the tax in respect of all preceding financial years was settled in accordance with of the returns submitted. The balance as at year-end 2008 relates solely to the reporting period.

n. Deferred tax

CompositionDeferred tax assets 1,290 - Deferred tax liabilities (6,923) -

Net deferred tax asset / (liability) (5,633) -

1 January 2008

Movement via Income

statement

Movement via Balance sheet

31 December2008

Origin of deferred tax assets and liabilitiesTax loss carryforwards - - - -Available-for-sale financial assets of subsidiairies and associates - - (2,264) (2,264)Goodwill and intangible assets - - (2,792) (2,792)Other - (577) - (577)

Net asset / (liability) - (577) (5,056) (5,633)

o. Other assets 8,189 8,506

The item comprises:Trade receivables 646 71 Receivables relating to securities sold, but not yet delivered 6,523 6,413 Receivables from subsidiaries and associates - 1,781 Other investments 29 29 Other receivables 991 212

8,189 8,506

Other receivables have maturities of less than one year.

The other investments concerns interests in the share capital of Inmaxxa B.V. and LPE Capital B.V. of less than 5%. These investments are carried at cost in the absence of a reliable measurement of fair value.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

p. Prepayments and accrued income 30,962 22,442

This item comprises:Interest receivable 25,777 16,163 Commission receivable 2,426 2,392 Other prepayments and accrued income 2,759 3,887

30,962 22,442

q. Customer deposits 1,747,699 1,772,822

This item comprises:Savings accounts 861,239 624,774Demand deposits 886,460 1,148,048

1,747,699 1,772,822

r. Financial liabilities at amortised cost - 1,080

The profit-sharing bond loan concerns a loan granted by a group of employees. With the agreement of the bondholders, the entire loan was repaid in January 2008.

s. Provisions 93 146

The movements in the provision for onerous contracts were as follows:Carrying amount as at 1 January 146 199 Released to income (53) (53)

Carrying amount as at 31 December 93 146

The provision for onerous contracts has been recognised in respect of rented office space, where the costs of the lease are higher than the economic benefits expected to be generated by the contract. The period for which the provision has been formed is equal to the remaining period of the lease, which expires on 1 October 2010, but will be reduced as and when the economic benefits are deemed likely to exceed the costs. The discount rate applied to this provision is equal to the expected future rate of increase in the rent.

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31 December 2008 31 December 2007x € 1,000 x € 1,000

t. Other liabilities 54,995 29,765

This item comprises:Liabilities in respect of securities transactions not yet settled 36,462 13,853 Tax and social security contributions 1,094 1,406 Amounts owed to subsidiaries 8,123 - Part of the purchase price for Syntel still payable - 3,750 Trade payables 7,068 9,601 Other liabilities 2,248 1,155

54,995 29,765

Part of the purchase price relating to the acquisition of the share capital of Syntel depended on Syntel’s gross margin over the years 2007 and 2008. Syntel’s performance in 2007 and the first three quarters of 2008 was sufficient to justify the settlement of the outstanding amount of the purchase price in the fourth quarter of 2008.

u. Accruals and deferred income 22,752 21,106

This item comprises:Staff costs 5,336 2,652 Accrued interest 11,952 13,106 Stock exchange and clearing costs payabale 898 1,339 Other 4,566 4,009

22,752 21,106

v. Shareholders' equity 477,641 466,816

Issued share capital 7,709 7,709

A total of 77,093,508 ordinary shares were in issue, each with a nominal value of € 0.10. The share capital is fully paid up. On 14 December 2007, 46,256,105 shares were issued in connection with a 3-for-2 rights issue at a price of € 8.32 per share.

Number of shares as at 1 January 77,093,508 30,837,403Issue 46,256,105

Number of shares as at 31 December 77,093,508 77,093,508

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

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Share premium 392,395 392,395

The share premium is exempt from tax and in principle freely distributable.

Treasury shares (5,628) (487)

Number Amount Number Amount Carrying amount as at 1 January 129,137 (487) 253,145 (956)Issued to Management Board members and employees (67,477) 254 (19,508) 74 Exercise of options (34,073) 129 (100,000) 378 Reacquired from employees 1,275 (5) (4,500) 17 Acquired through treasury share repurchase programme 1,024,580 (5,519) - -

Carrying amount as at 31 December 1,053,442 (5,628) 129,137 (487)

As at 1 January 2008, the number of treasury shares held was 129,137, acquired at an average purchase price of € 3.78. In 2008, 101,550 treasury shares were issued. The issued shares were charged to other reserves at the average purchase price of € 3.78. In 2008, 1,024,580 shares were repurchased through the share buy-back programme at an average price of € 5.39 and 1,275 shares were acquired from an employee of Syntel who has left the company at a price of € 3.78. The carrying amount of the repurchased treasury shares as at year-end 2008 was measured at the average purchase price of € 5.34. The change in equity in respect of treasury shares reflects the amounts bought and sold. The quoted share price as at year-end 2008 was € 5.45 (2007: € 10.11).

On 7 May 2008, a total of 30,500 shares were granted members of the Management Board and employees as a variable remuneration element in respect of performance in 2007. The expense was recognised in 2007. On the same date, 17,530 shares were granted to the Management Board and employees under the bonus share scheme forming part of the long-term remuneration package, the award of which was made in respect of the 2004 financial year. A change in remuneration policy resulted in the buy-out in 2008 of accrued entitlements to bonus shares as part of the long-term remuneration for the Management Board in respect of the years 2005–2007, by the issue of 19,447 shares. The associated costs were recognised in the years 2004–2007.

31 December 2008 31 December 2007x € 1,000 x € 1,000

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Unappropriated profit 33,145 32,155

Carrying amount as at 1 January 32,155 24,009 Added to other reserves (32,155) (24,009)Profit for the year 33,145 32,155

Carrying amount as at 31 December 33,145 32,155

Fair value reserve 6,616 (1,342)

Carrying amount as at 1 January (1,342) (649)Unrealised gains on available-for-sale financial assets 8,451 (930)Unrealised losses on available-for-sale financial assets (3,050)Fair value gains and losses recognised through profit and loss (231)Tax on unrealised gains and losses on available-for-sale financial assets 2,788 237

Carrying amount as at 31 December 6,616 (1,342)

The reserve comprises the fair value gains and losses, after tax, on available-for-sale financial assets.

Other reserves 43,404 36,386

These comprise:(I) Foreign currency translation reserve 70 209 (II) Revaluation reserve for subsidiaries and associates 2,216 - (III) Other reserves 41,118 36,177

43,404 36,386 (I) Foreign currency translation reserve

Carrying amount as at 1 January 209 334 Movement (139) (125)

Carrying amount as at 31 December 70 209

The foreign currency translation reserve comprises exchange differences arising on translation of the financial statements of non-eurozone subsidiaries.

31 December 2008 31 December 2007x € 1,000 x € 1,000

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2008 2007x € 1,000 x € 1,000

(II) Revaluation reserve for subsidiaries and associates

Carrying amount as at 1 January - - Movement 2,216 -

Carrying amount as at 31 December 2,216 -

This reserve comprises the gains and losses in the fair value of the equity-accounted investments due to movements in equity as a result of revaluation of the available-for-sale financial assets in the subsidiary or associate.

(III) Other reserves

Carrying amount as at 1 January 36,177 24,612 Rights to shares granted 58 535 Issue of shares to Management Board and employees (254) (74)Proceeds from the sale of rights attaching to treasury shares - 422 Exercise of options (50) (154)Payment of final dividend (11,560) (8,874)Payment of interim dividend (15,413) (4,299)Shares reacquired from employees 5Appropriation of profit for previous year 32,155 24,009

Carrying amount as at 31 December 41,118 36,177

For details of the option rights, rights to shares and the bonus scheme for Syntel staff, see note 28 to the consolidated financial statements.

w. Other information

The total fees charged to the entity during the year for auditing the 2008 financial statements amounted to € 420,000 (2007: € 433,000). The costs for other audit engagements in 2008 amounted to € 90,000 (2007: € 60,000). For audit-related activities in 2008, charges amounted to € 37,000 (2007: € 496,000). The audit-related activities in 2007 included activities concerned with the prospectus in connection with the acquisition of Alex Beleggersbank.

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Auditors’ Report

To: The General Meeting of Shareholders ofBinckBank N.V.

Report on the financial statementsWe have audited the financial statements of BinckBank N.V., Amsterdam, for the year 2008 (as set out on pages 87 to 165). The financial statements consist of the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December 2008, income statement, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. The company financial statements comprise the company balance sheet as at 31 December 2008, the company income statement for the year then ended and the notes.

Management’s responsibilityManagement is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the management board report in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial

statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statementsIn our opinion, the consolidated financial statements give a true and fair view of the financial position of BinckBank N.V. as at 31 December 2008, and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code.

Opinion with respect to the company financial statementsIn our opinion, the company financial statements give a true and fair view of the financial position of BinckBank N.V. as at 31 December 2008, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Other information

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Report on other legal and regulatory requirementsPursuant to the legal requirement under 2:393 sub 5 part f of the Netherlands Civil Code, we report, to the extent of our competence, that the management board report is consistent with the financial statements as required by 2:391 sub 4 of the Netherlands Civil Code.

Amsterdam, 6 March 2009

Ernst & Young Accountants LLP

Signed by N.G.D. Warmer

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Provisions of the Articles of Association in respect of priority shares (Articles 15 and 21)

The rights attached to the priority shares include the right to make non-binding nominations for appointment to the company’s Supervisory Board and Management Board and to take various other actions. The priority shares are held by Stichting Prioriteit Binck, Amsterdam. This foundation’s Board, which consists of three members, is appointed by the Supervisory Board and Management Board of the company.

The Board members of Stichting Prioriteit Binck are:C.J.M. ScholtesJ.K. BrouwerT.C.V. Schaap

Provisions of the Articles of Association in respect of appropriation of profit (Article 32)

1. The company may only make distributions to the shareholders if the company’s equity exceeds its issued and paid-up share capital plus the reserves required to be held by law or by the Articles of Association.

2. Firstly – and only insofar as profits allow – an amount equal to six per cent (6%) of the nominal value of the priority shares will be distributed on these shares.

3. The foundation will determine the extent to which the remaining profits will be transferred to reserves. Profits remaining after application of subsection 2 and the first sentence of this subsection will be at the disposal of the General Meeting of Shareholders. Any amounts not distributed will be transferred to the company’s reserves.

4. Withdrawals from distributable reserves may be made pursuant to a resolution by the General Meeting of Shareholders, subject to the prior consent of the foundation.

5. The Management Board may resolve to allow the company to make interim distributions, providing it demonstrates in the form of an interim statement of assets and liabilities as referred to Section 105, subsection 4, Book 2, of the Netherlands Civil Code that it complies with subsection 1 above and subject to the prior consent of the foundation. The distributions referred to in this subsection may be made in cash, in shares in the company’s equity or in marketable rights thereto.

6. The General Meeting of Shareholders may resolve to declare that distributions on shares other than interim distributions as referred in subsection 5 of this Article (whether at the shareholders’ discretion or otherwise) may, instead of being made in cash, be made fully or partly (whether at the shareholders’ discretion or otherwise) in:

a. ordinary shares (which will, if desired and possible, be charged to the share premium reserve) or marketable rights to ordinary shares, or

b. equity instruments of the company or marketable rights thereto.

A resolution as referred to in the previous sentence may only be passed after being proposed by the Management Board and approved by the Supervisory Board. A proposal to pass a resolution as referred to in b will be submitted only after consultation with Euronext Amsterdam N.V.

7. No distribution will be made to the company in respect of shares it holds in its own capital or on shares for which the company holds depositary receipts.

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8. The calculation of the profit distributable on shares will disregard shares that are not eligible, pursuant to subsection 7, for such distribution.

9. Once a resolution to make a distribution has been passed, the amount will be declared payable within fourteen days. An entitlement to receive a distribution will lapse five years after the date on which the amount is declared payable, and the said amount will then revert to the company.

Proposal for appropriation of the result

An interim dividend of € 0.20 per share has already been paid in respect of 2008. The remainder is at the disposal of the General Meeting of Shareholders. It is proposed to distribute this in the form of a final dividend of € 0.21 per ordinary share. The profit appropriation will then be as follows:

x € 1,000Profit in 2008 33,145

Less: Transferred to other reserves (1,542)

Less: Interim dividend paid for 2008 (15,413)

At shareholders’ disposal 16,190

This proposal is not reflected in the balance sheet.

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Definitions and ratios

Basic indicator approach Under this approach, banks must hold capital to cover operational risk equal to 15% of the average over three years of the sum of net annual interest income and net annual non-interest income.

BIS ratio A solvency ratio for banks expressing specified capital components as a percentage of the risk-weighted assets. The minimum ratio of 8% was set by the Bank for International Settlements (BIS).

Concentration risk The risk to capital, result or continuity due to a skewed portfolio mix.

Credit risk The risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.

Currency risk The risk to capital, result or continuity due to changes in the level or volatility of foreign exchange rates.

Duration The weighted average maturity of cash flows, where the weighting of each cash flow is determined by its relative magnitude.

Fair value The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.

Interest-rate risk The risk to capital, result or continuity due to changes in the level or volatility of market interest rates.

Liquidity risk The risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments.

Market risk The risk to capital, result or continuity as a result of changes in market prices whether those changes are caused by factors specific to the individual security or its issuer or factors affecting all securities traded in the market.

Operational risk The risk to capital, results or continuity of ineffective or insufficiently effective process configuration or execution or external events.

Own funds Financial resources which, according to the regulator’s rules, qualify for inclusion in calculating Tier 1, Tier 2 and Tier 3 capital.

Risk-weighted assets Assets weighted for credit risk, using the weighting percentage used in regular reporting to De Nederlandsche Bank.

Share premium reserve The paid-in capital over and above the nominal value of the shares.

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Solvency The availability of cash over the longer term to meet financial commitments as they fall due. The extent to which an entity is able to meet its liabilities is expressed as a ratio (solvency ratio).

Solvency ratio The solvency ratio expresses as a percentage the relationship between the available capital and the required capital.

Standardised approach A method used in Basel II to measure a bank’s operational risk and credit risk, in which the risk weighting is prescribed by the regulator.

Stress test A test used to analyse the financial resilience of a financial institution in scenarios with significant but realistic changes in parameters that are highly relevant to the institution, such as macro-economic changes, crises on financial markets, changes in legislation and regulations and variations in liquidity on money and capital markets.

Tier 1 capital Also known as ‘core capital’, Tier 1 capital comprises the paid-up share capital, all the reserves except revaluation reserves, unappropriated profits, minority interests and innovative Tier 1 instruments as defined by De Nederlandsche Bank. Tier 1 capital does not include goodwill, intangible assets except software (both bought-in and developed in-house) for own use and equity interests of more than 10% in financial institutions.

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BinckBank N.V.Vijzelstraat 201017 HK AmsterdamThe Netherlands

Correspondence addressP.O. Box 155361001 NA AmsterdamThe Netherlands

Tel: +31 (0)20 606 26 66Fax: +31 (0)20 320 41 76

Internet: www.binck.com

BinckBank N.V., established in Amsterdam and entered in the Trade Register of the Amsterdam Chamber of Commerce under no. 33 16 22 23.

Investor RelationsTel: +31 (0)20 522 03 72Email: IR@binck.nl

Colophon

Coordination and productionImprima (Nederland) bv

PhotographyEveline Renaud, Amsterdam

Where reference is made in this annual report to Ô BinckBankÕ , it denotes BinckBank N.V. Where reference

is made in this annual report to Ô Alex BeleggersbankÕ , it denotes what was formerly part of Coš peratieve

Raiffeisen-Boerenleenbank B.A. (Ô RabobankÕ ), which BinckBank N.V. acquired in 2007. Where reference is

made in this annual report to Ô AlexÕ , it denotes the label under which the Alex Beleggersbank services are

provided. Where reference is made to Ô SyntelÕ , it denotes the subsidiary Syntel Beheer B.V.

This document is a translation of the Dutch original and is provided as a courtesy only. In the event of any

disparity, the Dutch version shall prevail. No rights may be derived from the translated document.

Continuing the theme of previous annual reports, the illustrations this year again trace the route from

BinckBank to a stock exchange, taking in historical and other landmarks, to symbolise the links our

clients have with the stock exchange through BinckBank. In previous years, we were in Amsterdam, where

our main office is located, and Antwerp, where we have our Belgian branch. This year, we are in Paris,

from where we run our French operations. Starting at ➊ the BinckBank branch, our route takes us via

➋ La DŽ fense to ❸ the Arc de Triomphe. Passing ➍ the Eiffel Tower, photographed from the TrocadŽ ro, we

cross the Seine on ➎ Pont Alexandre III and make our way to ➏ the Louvre. Our journey ends at ❼ Le Palais

Brongniart, the old stock exchange building. The people in the photographs are our colleagues from the

Paris branch.

Annual report 2008

BinckBank N.V.Vijzelstraat 201017 HK AmsterdamNetherlands

P.O. Box 155361001 NA AmsterdamNetherlands

T +31 20 522 0330F +31 20 522 0340E info@binck.comI www.binck.com

Annual report 2008BinckBank N

.V.